COVID & AOFM Guidance At The Fore

The Aussie bond space stuck to narrow ranges during Sydney hours, with YM & XM closing at unchanged levels. Focus remained on the domestic COVID-19 situation and guidance from the NSW government which advised residents in one of Sydney's suburbs to stay at home as much as possible over the next three days to fight the cluster that has emerged. The cash ACGB curve saw some light twist steepening, with some knock-on from Thursday's U.S. Tsy trade seen.

• Elsewhere, post-MYEFO issuance guidance from the AOFM was noted, in which it knocked its ACGB issuance target for the current fiscal year down to A$230bn vs. around A$240bn previously (A$153.5 billion has been completed YtD). The AOFM reiterated that "specific guidance on weekly tender volumes together with plans for new Treasury Bond lines will be provided on 15 January 2021."
• A reminder that yesterday's round of ACGB purchases from the RBA represented the last scheduled round of such purchases scheduled for '20, with the Bank set to resume its bond buying scheme in the new year.
• Flash retail sales data headlines next week's local docket.