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Cross-Market Flows Likely Dictating ACGB Underperformance

AUSSIE BONDS

The weakness in ACGBs is somewhat peculiar, given general core FI richening, with YM -6.0 & XM -5.0, while the broader cash ACGB benchmarks sit ~5bp cheaper, in what has been a fairly parallel shift. This once again leads us to conclude that cross-market flows are at the fore, with the AU/U.S. 10-Year yield spread resuming its recent widening, perhaps aided by some exits from crowded compression trade positioning in that spread.

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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