Fresh Longs Lodged?

We suggested that the early bid in the longer end of the ACGB curve could have been a result of cross-market plays vs. the U.S., while the bid in the shorter maturity ACGBs/red bill contracts may suggest that participants believe that the recent move lower has gone too far, too fast, meaning that some may be establishing fresh longs after the recent flush out. YM +2.0, XM +4.0 at the close, with the overnight steepening more than unwound. Elsewhere, speculation did the rounds re: the potential for the RBA to become more active with its ACGB purchases in coming days, given the recent sell off and steepening seen between ACGB Apr '24 & Nov '24.

• Australian PM Morrison confirmed that the JobKeeper/Seeker schemes will come to an end in March, while also confirming some modest, permanent tweaks to the unemployment support package (which were widely expected).
• Credit rating news came in the form of Moody's downgrading Victoria to Aa1 from Aaa, with the state's outlook set to negative. Moody's noted that the move reflects "a marked erosion in Victoria's governance of its public finances, at a time when the state faces substantial operating deficits as it responds to the pandemic-induced economic disruptions and embarks on a significant capital spending program."
• Wednesday's local docket will be headlined by Q4 completed construction work and wage data, while the AOFM will come to market with A$2.0bn of ACGB 1.25% 21 May 2032 supply.