Bearish Flattening Holds, YM Tests Overnight Base

The post-NFP reaction continues to dominate during early Sydney trade, with YM -17.5 and XM -15.0. Note that both contracts have failed to break through their respective overnight session troughs although YM has tested its post-NFP base on a couple of occasions thus far, with the bear flattening dynamic remaining in play.

• Cash ACGB trade sees the major benchmarks print 11.5-17.0bp cheaper across the curve.
• A downtick in crude oil futures allowed the space to find a bit of a base early on, but some fresh weakness in U.S. Tsys seems to have leaked into ACGBs.
• EFPs sit 1.0-1.5bp narrower on the day.
• The IR strip is 11-21bp cheaper through the reds.
• Outside of the previously flagged round of ACGB Apr-37 supply, participants will also be on the lookout from any spill over from the latest round of NZ inflation expectations data from across the Tasman.