Flatter

Futures operate a touch shy of best levels, with YM +3.5 and XM +5.5, as the overnight U.S. Tsy-driven bull flattening remains intact, if a little less pronounced vs. what was seen on the U.S. curve.

• Bills run flat to 4 ticks firmer through the reds, also bull flattening.
• News out of South Africa re: the Omicron variant remains mixed, although the severity of the COVID strain appears to remain a little more limited than some had feared. Meanwhile, over in the U.S., Dr Fauci pointed to “encouraging” early signs, with booster jabs potentially offering a “considerable degree” of protection vs. the strain, although he cautioned against drawing hasty conclusions
• Locally, the weekend saw Treasurer Frydenberg point to an upgrade in the government’s growth outlook in the upcoming mid-year budget update. This comes as no real surprise in the wake of the firmer than expected Q3 GDP data, which provides a better starting point for the economy.
• The latest round of scheduled RBA ACGB purchases and A$1.5bn of ACGB Nov-24 supply headline the local docket on Monday. We will also get the release of the latest round of ANZ job ads data.