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Holding Steeper Into RBA

AUSSIE BONDS

Futures hold steeper ahead of the RBA decision, with YM -4.0 and XM -8.0 at typing. A quick reminder that the RBA is expected to remove its YCT mechanism, which would open the way for a tweak to the Bank's forward guidance. The bill strip runs steeper, with contracts there 2-8 ticks lower through the reds. AUD 1-Year/1-Year swap rates sit around 1.60%, the best part of 30bp off last week's high, but current levels still represent a ~130bp rally vs. late September levels given the recent repricing on global dynamics, firmer than expected underlying Australian CPI in Q3 and RBA inaction when it comes to the enforcement of its YCT mechanism.

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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