Contained Ranges, Better Bid At The Margin

Aussie bond futures held narrow ranges in overnight trade, as U.S. Tsys firmed. There was a brief and relatively modest blip higher on trans-Tasman spill over from the previously covered NZ labour market report, but that impulse has faded, leaving YM and XM +1.0.

• Cash ACGBs run ~1bp richer across the curve.
• Bills sit 2-4bp richer through the reds.
• The finial Judo Bank m’fing PMI print has been and gone, without any market reaction, as is the norm. The headline index printed at 50.0, a touch better than the flash 49.8, in what was the first non-expansionary print observed since the depths of the initial COVID outbreak. The survey sponsor noted that “Australia’s manufacturing sector is on track for a soft landing in 2023, while the operating environment is quickly returning to normal following three years of pandemic induced disruption.”
• Elsewhere, CoreLogic house price readings revealed another slide in valuations, as the impact of the swift round of RBA tightening deployed in ’22 continues to make its presence felt.
• Looking ahead, A$700mn of ACGB May-34 supply presents the highlight of the domestic docket during the remainder of the session, while participants will also look to the latest Caixin manufacturing PMI print out of China.
• A reminder that the proximity to Wednesday’s U.S. Federal Reserve decision may limit position taking appetite.