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No Lasting Impact From Evans’ Hawkish View Change

AUSSIE BONDS

There was nothing in the way of lasting impact in Aussie Bond futures after Westpac chief economist Evans adopted a more hawkish view on the RBA (See earlier bullet for details), with YM & XM unwinding their initial, modest downticks. Note that Aussie bonds have moved away from best levels alongside the selling pressure observed in U.S. Tsys during Asia-Pac dealing, although the space remains comfortably firmer when compared to Thursday’s closing levels on the back of the post-ECB & U.S. data dynamics observed in the wake of yesterday’s Sydney close. YM is +10.0, while XM is +12.5. Wider cash ACGB trade sees the major benchmarks running 7-12bp richer on the day, with the 7- to 12-Year zone outperforming. Aussie 10s are 2.5bp wider vs. their U.S. counterpart, but that spread remains well within the confines of the recent range. Bills run 6-14bp richer through the reds.

  • Note that the release of the weekly AOFM issuance schedule saw a step down to $A1.3bn (from the ‘normal’ A$1.5bn) when it comes to next week’s ACGB issuance, with the AOFM set to issue ACGB Nov-33 and ACGB Mar-47. Note issuance will also moderate to A$2.0bn from the ‘usual’ A$2.5bn.
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There was nothing in the way of lasting impact in Aussie Bond futures after Westpac chief economist Evans adopted a more hawkish view on the RBA (See earlier bullet for details), with YM & XM unwinding their initial, modest downticks. Note that Aussie bonds have moved away from best levels alongside the selling pressure observed in U.S. Tsys during Asia-Pac dealing, although the space remains comfortably firmer when compared to Thursday’s closing levels on the back of the post-ECB & U.S. data dynamics observed in the wake of yesterday’s Sydney close. YM is +10.0, while XM is +12.5. Wider cash ACGB trade sees the major benchmarks running 7-12bp richer on the day, with the 7- to 12-Year zone outperforming. Aussie 10s are 2.5bp wider vs. their U.S. counterpart, but that spread remains well within the confines of the recent range. Bills run 6-14bp richer through the reds.

  • Note that the release of the weekly AOFM issuance schedule saw a step down to $A1.3bn (from the ‘normal’ A$1.5bn) when it comes to next week’s ACGB issuance, with the AOFM set to issue ACGB Nov-33 and ACGB Mar-47. Note issuance will also moderate to A$2.0bn from the ‘usual’ A$2.5bn.