Futures Hold Overnight Losses, ACGBs Look Through Uptick In JGBs

Aussie bonds futures were happy to trade around levels seen late in the final overnight session of last week, looking through some richening in JGBs & U.S. Tsys after outperforming vs. their U.S. equivalents after Friday’s Sydney close (the Asia rally in Tsys chipped away at that outperformance).

• That left YM -4.0 & XM -5.5 at the bell. Meanwhile, wider cash ACGBs were 4-6bp cheaper, with some light bear steepening observed.
• EFPs dealt either side of unchanged through the session, finishing little changed.
• Bills finished 3-4bp cheaper through the reds, in a parallel shift, once again lacking anything in the way of real traction during Sydney hours.
• RBA dated OIS is still showing ~20bp of tightening for next month’s meeting, while terminal cash rate pricing shows just above 3.55% mark, a touch firmer on the day.
• A reminder that the LNY holiday period will thin out broader liquidity during Asia-Pac hours to varying degrees throughout the week.
• Wednesday’s Q4 CPI data headlines this week’s domestic docket, and will be supplemented by PPI, terms of trade, the monthly NAB business survey, Westpac leading index and Judo Bank flash PMIs.
• It is also worth noting that Australian markets will be closed on Thursday for the Australia Day holiday.