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Bailey Unwinds Chunk Of Overnight Bid, RBA’s Ellis Eyed

AUSSIE BONDS

The spill over from the previously alluded to comments from BoE Governor Bailey meant that the major Aussie bond future contracts unwound the bulk of their overnight uptick into the close of post-Sydney dealing, leaving YM +2.5 & XM +2.5 in early Wednesday trade, in line to a touch above late post-Sydney levels.

  • Wider cash ACGB trade sees 2-3bp of richening for the major benchmarks, representing a fairly parallel shift across the curve.
  • Bills run flat to +1 through the bulk of the reds, with RBA dated OIS pricing a terminal rate of just over 4.00%, incrementally higher on the day.
  • An address from RBA Assistant Governor (Economic) Ellis on “The Neutral Rate: The Pole-star Casts Faint Light,” headlines the domestic docket on Wednesday. Elsewhere, A$800mn of ACGB Nov-32 supply is due.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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