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Flatter, RBA To Dominate On Tuesday

AUSSIE BONDS

The flattening of the U.S. Tsy curve dragged Aussie bond futures flatter in overnight dealing, with the major contracts showing marginally above late overnight highs at the Sydney re-open, before backing off a touch, leaving YM +2.0 & XM +5.0 at typing. Bills run 1-4bp richer through the reds.

  • Sino-U.S. tensions surrounding U.S. House Speaker Pelosi’s seemingly imminent visit to Taiwan and U.S. data were the main drivers in post-Sydney trade.
  • The latest RBA decision headlines the domestic docket on Tuesday, with the overwhelming consensus looking for a 50bp hike come the end of today’s decision (see our full preview of the decision here). Note that the OIS strip currently prices in ~47bp of tightening i.e. a 50bp hike is virtually fully priced, after as much 65bp of tightening was priced in earlier this month. Elsewhere, domestic building approvals and housing finance data is due to be released.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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