Twist Flattening

Aussie bonds are off best levels, aided by U.S. Tsys backing away from their own extremes, with an initial bid in core FI (owing to Walmart’s disappointing earnings guidance after the bell) moderating throughout Sydney hours as equities in Asia received a lift from Chinese real estate and large-cap tech names. Cash ACGBs run 3.0bp cheaper to 2.0bp richer across the curve, twist flattening, pivoting around 3s, while YM and XM are -1.0 and +1.0, respectively, with the latter having briefly shown through its own overnight highs earlier in the session. Bills run 6 ticks cheaper to 2 ticks richer through the reds, twist flattening.

• Recent comments in a BBG interview from RBA Board member Harper coincided with a light cheapening in the front end of the cash ACGB curve, with the RBA board member stating that the Australian economy was “robust” enough to endure higher rates, emphasising the need to fight “broad-based” price pressures, while stating that concerns re: “overreach” on rate hikes was “overblown”.
• ACGBs looked through the release of weekly ANZ-Roy Morgan consumer confidence (the sole domestic data release due today), which saw a slight improvement to 82.4 (vs. 81.8 prev.).