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Long Leads The Bid


Aussie bond futures have held to very narrow ranges, with YM & XM both +0.5 at typing. Cash ACGBs have twist flattened, with 30s running 3.0bp richer on the day.

  • The latest NAB business survey saw a modest downtick in the confidence component, while conditions moved to a fresh record high.
  • AOFM CEO Nicholl spoke at a private event, with BBG noting that the AOFM will be paring back the information it provides to the market on issuance plans, in order to gain more flexibility as the economy recovers from the pandemic. Key takeaways are given below (provided by BBG):
  • The office will now provide detail on new maturities in two stages: in early July and again in January.
  • Buybacks of short-dated bonds will remain suspended until the end of 2021-22 "at least."
  • The AOFM doesn't intend to establish new third maturities in some years "in the foreseeable future," though it hasn't abandoned the option.
  • Maturity gaps will occasionally need to be filled to support the 10-Year futures contract. Another new 30-Year maturity "will not be under consideration for some time."
  • Decision on issuance to support the 20-Year contract is yet to be made, one more maturity of 2043 or a 2044 will be announced in time.
  • The AOFM also plans to add a new inflation-linked bond around the 10-Year part of the curve. "Should that proceed for the 2021-22 year it would be sensible to assume establishment by syndication and increasing gross issuance above the $2.5 billion already allocated for regular tenders," the CEO said.
  • A$1.0bn of ACGB 1.00% 21 Nov '31 supply is due on Wednesday, as is Westpac's monthly consumer confidence reading & ABS payrolls data. Elsewhere, RBA Assistant Governor will appear at the KangaNews Debt Capital Markets Summit. We should also expect roll activity to pick up, with futures moving to smaller tick increments after hours today.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |