Late Overnight Levels Prevail

The re-open saw YM add to the modest bid that was observed in the final overnight session of last week (although the contract got nowhere near challenging overnight highs), before paring back. That leaves both YM & XM hovering around late overnight levels, +3.0 & +0.5, respectively. This comes after two-way overnight dealing ahead of the weekend, with gyrations in the wider core global FI and U.S. equity spheres at the fore after Friday’s Sydney close (details fleshed out elsewhere).

• A quick look to notable domestic news flow since the final Sydney close of last week reiterates the well-documented focus on inflation. Treasurer Chalmers stressed that the cost of living crisis will get worse, while suggesting that the recent RBA communique re: inflation hitting the 7% level before the end of the year was in the right ballpark. Elsewhere, after hours on Friday we saw RBA Governor Lowe reiterate his preference for 25 or 50bp rate hikes at present, while he underscored the Bank’s focus on inflation psychology.
• The Bill strip runs flat to +6 through the reds.
• A$600mn of ACGB Jun-51 supply headlines domestic matters on Monday.