Futures A Little Below Settlement, But Off Overnight Lows

Wider core global FI market gyrations drove Aussie bond futures in overnight dealing, with the major contracts finishing comfortably off of their respective post-Sydney session bases (after a look through their respective Sydney troughs). The move away from cheaps came as Fedspeak allowed some of the post-CPI rate hike premium to be unwound for the short-end of the U.S. rates space. That leaves YM -2.5 & XM -1.0 early on, largely in line with late overnight levels, while Bills run +5 to -6 through the reds, twist steepening.

• The release of the AOFM’s weekly issuance slate and A$700mn of ACGB Apr-27 supply headline the domestic docket on Friday, although Chinese GDP and economic activity data provides the main risk event for the space during Sydney hours.