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Pullback Considered Corrective


Holding Above Recent Lows


BLOCK, Large 3Y Midcurve Put Condor

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The previously flagged and heavily discussed questions surrounding the economic impact of the domestic COVID lockdowns & subsequent impact on RBA policy have provided some underlying support for the space, leaving YM at unch. levels, while XM is +0.5. The cash ACGB curve is steeper on the day, with the long end running ~3.0bp cheaper, albeit off of cheapest levels. The latest round of ACGB Dec '30 supply saw the weighted average yield print 0.32bp through prevailing mids at the time of supply (per Yieldbroker). The cover ratio firmed vs. the prev. auction of the line, even when you account for the decrease in the amount on offer, with the well-defined supportive factors re: ACGB demand outweighing some valuation headwinds.