Bear Flattening

The weakness in YM remains a little stickier than in XM, with the former trickling back towards session lows after the U.S. Tsy-led, PBoC-driven uptick flagged elsewhere. YM -8.0 & XM -5.0 at typing. Super long ACGBs are ~4bp cheaper on the session.

• EFPs are wider on the day, with the 3-/10-Year box flattening.
• Bills are 4-10 ticks cheaper through the reds, with little reaction to the latest 3-month BBSW fixing, which set ~2.8bp higher. Note that the cheapening in the bond space had already shifted Bills lower pre-fixing.
• An uptick in the weekly ANZ-Roy Morgan consumer confidence print (although the index was still comfortably below 100.0) and firm Westpac leading index reading had little impact on the space.
• One other matter to be aware of in coming sessions will be the potential re-deployment of ACGB coupon payments, with ~A$4.9bn of ACGB coupons being paid yesterday. Elsewhere, the cash flows surrounding the maturity of the A$7.0bn 22 April ’22 note may impact the shorter end of the curve intraday in the coming sessions.
• Thursday’s local docket looks particularly light.