Flat Start After Flattening Overnight

The flattening impetus observed on the U.S. Tsy curve spilled over into bullish flattening of Aussie bond futures during the final overnight session of last week (albeit with Tsys twist flattening), leaving YM +3.0 & XM +6.0 early on in Sydney trade, in line with late overnight levels, with the latter testing its post-Sydney peak. Bills run flat to +2 through the reds.

• There hasn’t been much to note in the local press over the weekend, outside of some articles flagging the government’s desire to raise the skilled migrant quota to alleviate some of the tightness in the Australian labour market.
• The local docket is non-existent on Monday, although Chinese economic activity data will provide a focal point from further afield. Looking further out, Tuesday’s release of the minutes from the RBA’s August meeting, Wednesday’s Q2 wage price index data and Thursday’s labour market report provide the focal points of this week’s domestic calendar.