Choppy action for Aussie bonds after...>

AUSSIE BONDS: Choppy action for Aussie bonds after the prospect of targeted,

measurable and scalable fiscal easing was confirmed by PM Morrison pre-RBA, as

he noted that the government was highly aligned with the central bank re:

coronavirus response, with the latter putting a bid back into the space ahead of

the central bank's decision after some weakness. The RBA delivered a 25bp cut,

pledged to maintain liquidity, highlighted the impact of coronavirus on the

domestic econ (despite a relatively upbeat assessment of domestic matters ex.

virus) & lowered the bar re: further easing as it stripped back language in its

final paragraph, an interesting turn given the 25bp proximity to its ELB. The IB

strip prices a ~72% chance of a cut by the end of the Bank's April decision.

Morrison had stressed that the big banks should pass on the full 25bp of cuts to

customers, which they did via variable rate mortgages (ANZ offered 25-35bp worth

of cuts). YM finished unch., XM +1.0, Bills -2 to +3 thru reds. Local data gave

no impetus for the space pre-RBA.

- Focus Weds turns to GDP data and A$1.2bn worth of ACGB 1.25% 21 May 2032

supply. We will also see AiG PCI & final services/composite PMIs from CBA.