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Bobl call fly spread

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Futures steepened a little in overnight trade, given the impulse from the U.S. Tsy space, leaving YM -0.5 and XM -2.0 at the end of after-hours dealing.

  • A reminder that XM caught a bid late on in Sydney's Thursday session on the back of Westpac's Bill Evans suggesting that the RBA should announce a deferment of the taper planned for early Sep. He also suggested that the Bank should commit to A$6bn/week of bond purchases (currently A$5bn/week) through to the Nov board meeting in recognition of the economy's sudden deterioration and the uncertainty around the recovery phase owing to the COVID/lockdown situation.
  • It will be the COVID situation that dominates the local headline flow once again on Friday. Supply matters will also be eyed, with a A$700mn tap of ACGB 2.75% 21 November 2027 due to be carried out by the AOFM. The AOFM will also release its weekly issuance slate. The local data docket will be headlined by private sector credit for June and Q2 PPI data.