Cheaper On Global Impetus, Terminal Rate Pricing Moves Higher

Aussie bond futures saw some marginal bear steepening overnight, amid the wider sell off in core global FI markets that has been outlined elsewhere, with the outright moves being fairly notable.

• That leaves YM -12.0 & XM -15.0 shortly after the Sydney re-open, a little away from their respective overnight bases, with most domestic participants returning after Thursday’s holiday (note that a state holiday in Victoria will still provide some limit to liquidity on Friday).
• The break below the recent lows in both YM & XM leaves little in the way between the overnight bases in the contracts and their June lows, at least from a technical perspective.
• Bills run 4-17bp cheaper through the reds.
• Note that OIS pricing of the RBA terminal rate has pushed back up to ~4.05% as domestic participants adjust to Wednesday’s FOMC and subsequent market moves after Thursday’s holiday.
• Flash PMI data and the release of next week’s AOFM issuance slate headline domestic matters ahead of the weekend.