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No Real Movement Despite Decent Data & Victoria Lockdown

AUSSIE BONDS

Aussie bonds failed to exhibit a tangible reaction to the official declaration of a fresh COVID-related lockdown in the state of Victoria given the earlier press reports pointing to such a move. YM +0.5, XM +2.0 at typing.

  • On the domestic data front, private capex for Q1 was firmer than expected, with positive revisions for FY21/22 investment expectations (+7.9% from the initial estimate). The strong headline reading was driven by the equipment, plant and machinery component, which bodes well for the GDP release, building on the theme of decent domestic driven partials, although some of the offshore driven/related inputs aren't as encouraging.
  • Sino-Aussie tensions also continue to simmer, after China moved to close the espionage trial of Australian writer Yang Hengjun.
  • A portion of today's AOFM Note supply was conducted at negative yields (not for the first time), with the record levels of excess liquidity sloshing around in the domestic banking sector crimping yields, while U.S. domiciled bidders likely continued to hoover up the paper, which provides a positive yield when swapped back into US$.
  • The release of the weekly AOFM issuance schedule & A$1.0bn of ACGB 4.75% 21 April 2027 supply headline the local docket on Friday.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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