Cheaper On The Day As Local Issuance Matters Mix With Wider Headlines

Aussie bond futures go out a little off worst levels after the initial impact of weekend comments from Chinese health officials, which pointed to the country’s unswerving commitment to its dynamic zero COVID strategy, faded.

• The initial impulse on the back of those comments provided a modest bid, before the knock-on global inflationary impact that those policy settings contribute towards, plus local issuance dynamics (the new ACGB May-34 tender via syndication was launched, set to price tomorrow) and source reports from a couple of outlets pointing to back-channel U.S.-Russia talks re: the prevention of further escalation when it comes to the Ukrainian war weighed on prices.
• Elsewhere, a bid in Chinese & Hong Kong equities helped keep the pressure on the space.
• That left YM -2.0 & XM -5.5 at the bell, with wider cash ACGB trade seeing 1.0-6.5bp of cheapening as the curve bear steepened. EFPs were little changed on the day.
• Bills run -1 to +3 through the reds, with terminal RBA cash rate pricing little changed on the day, hovering around 4%, per RBA dated OIS.
• Outside of the pricing of the new ACGB May-34, Tuesday’s local docket will be headlined by CBA household spending data as well as the latest Westpac consumer & NAB business confidence surveys.