Futures Off Overnight Trough

Futures are cheaper given the impulse from U.S. Tsys since Thursday’s Sydney settlement, with the curve running a touch flatter as the contracts operate off of their overnight troughs, YM -3.5 & XM -2.0. Note that a fresh round of weakness kicked in during early Sydney dealing (likely on the back of late NY U.S. Tsy weakness & an uptick in U.S. equities), although those moves have pared and never threatened the respective overnight lows. The cash ACGB curve has twist flattened, with 3s providing the weak point, while 30s are marginally richer on the day.

• Local headlines continue to focus on pre-election and fiscal matters (the Federal budget will be delivered on Tuesday of next week), in addition to the Australian reaction to the Russia-Ukraine conflict (although there hasn’t been much in the way of market moving impulse from these stories in recent sessions, with ACGBs trading more as a function of the U.S. Tsy space).
• Local focus will fall on ACGB issuance matters on Friday, with A$1.0bn of ACGB Nov-24 supply due, in addition to the release of the AOFM weekly issuance slate.