Flattening Holds

Aussie bond futures ticked along in a narrow range during Sydney hours, with no reaction to the communique surrounding the phone call between the U.S. & Chinese Presidents. YM unch., XM +3.5 at the close, as the curve flattened, with swaps wider vs. ACGBs across most of the curve.

• On the central bank front a BBG interview with RBA board member Harper saw focus fall on the remaining excess capacity in the Australian economy, while he played down the risk of asset bubbles. On QE, Harper noted that the pace of the economic recovery, in both local and global terms, in addition to actions by other central banks are the main factors that will determine whether the Bank's bond buying scheme is extended again. Elsewhere, the space looked through comments made by Australian Treasury Secretary Kennedy (who also sits on the RBA board), as he noted that the country's economic recovery is probably "locked in" and the nation should shift to a "growth mindset."
• A$1.0bn of ACGB 3.25% 21 April 2029 supply headlines the local docket on Friday, with next week's AOFM issuance slate also set to hit.