Firmer Still, RBA's 3-Year Yield Target Under Control & Enforced

Roll flow continued to dominate in Sydney, with no tangible reaction in Aussie bonds to the latest round of fiscal support for the Australian economy (it does pale in comparison to previous rounds of support/bigger picture fiscal loosening).

• •The RBA provided its standard scheduled round of ACGB purchases.
• •YM +2.6 & XM +5.5 at the close, with Aussie 10s continuing to narrow vs. their U.S. counterpart in the wake of yesterday's address from RBA Governor Lowe, as the space built on the overnight richening into the close.
• •A combination of Lowe's dovish utterances and the recent tweaks to RBA provisions re: shorting ACGB Apr '23 & ACGB Apr '24 (making the zone more expensive to short) have allowed the yield on ACGB Apr '24 (the current target bond of the RBA's 3-Year yield targeting scheme) to print below 9bp, a far cry from the moves seen in February, with bond borrowing in the sector via the RBA's securities lending facility falling sharply in recent days.
• •The release of the AOFM's weekly supply schedule is set to dominate locally on Friday.