Firmer Throughout Sydney Trade

YM & XM operate off of best levels after the previously alluded to FT sources piece re: a potential extension of the BoE’s temporary bond purchase scheme allowed both contracts to briefly show through their respective overnight peaks. That leaves YM +6.5 & XM +8.0, with a fairly parallel 7-8bp of richening seen across the wider cash curve.

• There was little in the way of idiosyncratic news flow to drive the space, with comments from RBA Assistant Governor (Economic) Ellis providing a little bit more detail into the RBA’s thought process surrounding the idea of the neutral cash rate, albeit with little meaningful deviation from Governor Lowe’s previous musings and a continued insistence that the concept of a neutral rate acts more as a guide than as a required hard outcome for the Bank. The lack of hawkish surprises on this front allowed a slight bid to develop.
• A firm round of pricing in the latest round of ACGB Nov-32 supply provided little impetus for the wider ACGB space.
• Bills sit 4-8bp richer through the reds, with a terminal rate of just under 4.00% observed in RBA dated OIS, little changed on the day.
• Looking ahead., consumer inflation expectations data headlines Thursday’s domestic docket.