Firmer In The Second Half, Lowe’s Speech Now Eyed

There was little in the way of idiosyncracies to drive the Aussie bond space ahead of the weekend, leaving futures to meander through the final Sydney session of the week, with YM closing -2.0, in line with late overnight levels, while XM was +0.5, as the flattening impetus from wider core FI trade on Thursday was maintained. Wider cash ACGBs run 2bp cheaper to 5.5bp richer, pivoting around 10s.

• EFPs were essentially unchanged on the day.
• Early rounds of trade were driven by reaction to Thursday’s cheapening in wider core global FI markets, before the latest North Korean missile test (which saw the ICBM fall into the sea covered by Japan’s EEZ) provided a bid.
• The latest round of ACGB Nov-29 supply went well.
• Next week’s AOFM issuance slate is pretty vanilla, with ACGB Apr-25 & ACGB May-32 set to come to market.
• Bills finished +1 to -2 through the reds, with some light twist steepening seen.
• Looking ahead, next week’s local docket is lacking when it comes to major economic releases, with the flash S&P Global PMI prints providing the only real point of note. That means that it will be Governor Lowe’s Tuesday dinner address (on “Price Stability, the Supply Side and Prosperity”) that headlines the domestic docket.