Firmer & Flatter But Off Best Levels On Chinese Coal Import Chatter

Aussie bonds initially piggybacked the richening observed in global core FI markets in the wake of Tuesday’s local close, with a slight pullback in the RBA terminal rate pricing adding to the broader impulse.

• The space moved away from best levels late in the Sydney session on the back of a BBG source report which suggested that “Chinese bureaucrats are discussing plans to resume some imports of Australian coal after a more than two-year ban as relations between the nations improve.”
• That left YM +5.0 & XM +10.0 at the bell, after both contracts printed through their respective overnight peaks, before the aforementioned pullback.
• Wider cash ACGB trade sees the major benchmarks running 5.0-10.5bp richer across the curve, with a bull flattening theme observed all day.
• Bills finished flat to +8 through the reds, also bull flattening.
• RBA terminal cash rate pricing oscillated between 3.90-3.95% today.
• Looking ahead, final Judo Bank services & composite PMI data headlines the domestic docket on Thursday.