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Bear Flattening Impulse Holds

AUSSIE BONDS

YM & XM operate around levels seen at the end of the final overnight session of last week, with the impact of the latest piece from WSJ Fed whisperer Timiraos and news that Russia has suspended the Ukrainian grain export deal having limited impact on price action early this week.

  • That leaves YM -4.0 and XM -2.5, with Friday’s after hours spill over from the bear flattening impulse in global core FI markets lingering. Wider cash ACGB trade has seen 1.5-3.5bp of cheapening.
  • Bills run 3-7bp cheaper through the reds, steepening, with RBA dated OIS little changed this morning, pricing for the terminal cash rate hovers just below 4.00%.
  • Today’s domestic docket consists of retail sales, private sector credit and Melbourne Institute inflation data. Chinese PMI data presents the highlight of the Asia-Pac docket on Monday, with tomorrow’s RBA monetary policy decision providing the focal point of the domestic docket this week. Re: the RBA decision, another 25bp hike is widely expected, with dated OIS pricing ~26bp of tightening for the event (expect our full preview of the decision to be published later today).
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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