Bid On Global Matters

The previously alluded to mix of soft U.S. PPI data, hints in ECB speak that the pace of tightening could slow after the Bank’s December meeting and news of 2 civilian deaths in Poland, initially attributed to Russian missile fire (although there is a distinct lack of clarity surrounding that situation), provided a bid for core global FI markets on Tuesday, allowing Aussie bond futures to firm in post-Sydney trade.

• YM and XM operate a little shy of their respective post-Sydney highs, both +6.0 on the day, with 4.5-6.0bp of richening seen across the wider cash ACGB curve, which has bull steepened.
• EFPs are a touch tighter on the day, pointing to some receive side swap flow aiding the bid in ACGBs in early Sydney trade.
• Bills run 2-11bp richer through the reds, bull flattening. RBA dated OIS pricing is essentially flat this morning.
• A$900mn of ACGB Nov-33 supply is due later today, with WPI data and the Westpac leading index headlining the domestic economic docket.