Early Downward Bias Intact

The path of less resistance has been higher yields in the wake of the latest FOMC meeting, with a fresh downtick in U.S. Tsy futures helping ACGBs to cheapen during early Sydney dealing, as domestic headline flow remains limited at best.

• The space operates off of cheapest levels, but yields remain comfortably higher on the day, with the major benchmarks sitting 8-11bp cheaper, while YM is -12.0 and XM is -9.0, as the curve bear flattens.
• However, EFPs have more than reversed their early widening, with the 3- & 10-Year measures now ~4bp tighter on the session, suggesting receiver side flows in swaps are potentially helping ACGBs find a base.
• Bills print flat to -12 through the reds.