Bear Flattening

Cash ACGBs run 1-5bp cheaper across the curve, bear flattening as the space backs away from early cheaps, with the move facilitated by an uptick in U.S. Tsy futures as Asia-Pac participants react to Friday’s market moves and the WSJ’s Fed whisperer pointing to a 75bp rate hike later this month (via a weekend article). A downtick in crude oil futures will also be helping the bid in bonds. That combination has allowed the downside ACGB impetus that was seen in the wake of the NZ CPI print to be more than fully reversed. YM and XM are -3.0 and -2.0, respectively, operating comfortably within their overnight ranges, while Bills run 1-6 ticks cheaper through the reds, bear steepening.