Flatter To Finish The Week

The Aussie bond curve flattened on Friday, although it has been a fairly lacklustre end to week for the space. A slim weekly issuance slate from the AOFM, with the final week of 2020 issuance set to see only one round of conventional ACGB supply, would have provided some light support. Aussie 10s managed to chip away at their latest leg of underperformance vs. their U.S. equivalent as we moved through the day. YM unchanged, XM +2.5 at the close. Swaps were generally wider vs. ACGBS across the curve.

• Local retail sales data had little in the way of impact on the space, while the latest round of ACGB Nov '25 supply was better received than the '31 offering seen earlier this week (likely owing to a much more digestible DV01). The average yield of the auction stopped through prevailing mids by ~0.5bp (per BBG pricing), with the cover ratio slipping at the margin but still operating near the 6.00x area.
• The latest business and consumer confidence surveys headline the local economic docket next week. Elsewhere, Monday will see RBA Governor Lowe speak, although the topic of "Innovation and Regulation in the Australian Payments System" may limit the scope for anything in the way of meaningful remarks re: monetary policy.