Looking Across The Ditch

Some trans-Tasman impetus seemed to be at play in the Aussie bond space, with a rally in the NZGB space on the back of a well-received round of NZGB supply (building on early momentum stemming from light offer to covers in the latest round of RBNZ LSAP ops). These matters, coupled with short positioning, likely allowed the Aussie bond complex to firm. YM +2.0, XM +4.0 at typing, swaps lagging cash ACGBs, resulting in some swap spread widening across most of the curve.

• Today's ACGB Sep '26 supply was easily digested, with the weighted average yield printing 0.62bp through prevailing mids (per Yieldbroker pricing) as the cover ratio firmed vs. the prev. auction of the line (even when we account for the downtick in the notional on offer at today's auction). It would seem that the supportive factors we highlighted in our auction preview underscored demand.
• Domestic preliminary retail sales data for April was a touch firmer than exp. but didn't have any impact on the space.
• Q1 GDP partials, in the form of completed construction work and Private CapEx data, headline next week's local docket.