Off Best Levels

The long end of the Aussie cash curve backed off firmest levels of the day, but outperformed for most of the session. More broadly, continued focus falls on the negative net supply picture promoted by RBA ACGB purchases, while the AOFM issuance hiatus until calendar '21 provides further fuel to that fire (albeit with some semi-government bond issuance sprinkled in thus far). YM finished -0.6, with XM unch.

• Sino-Aussie tensions continue to draw attention, with worry re: China employing a broader round of measures/levies on Australian goods evident for most of the week. China's Global Times has also touched on the matter, with a recent editorial piece noting that ": Impacts of the downward spiral of China-Australia relations on Australian exports are striking in both scope and severity. As the most important part of China-Australia trade, iron ore may be less vulnerable to political shocks compared to other products, but it is not completely immune."
• Domestic COVID matters were also at the fore as the government stressed that the nation's successful containment of the virus allows it to launch vaccines on its own schedule. This came after the development of Australia's home-grown vaccine was shelved after several trial participants returned "false positives" for HIV during the testing scheme. The government accompanied the news by noting that it had purchased a round of 31mn cumulative doses of the AstraZeneca and Novavax vaccines.
• Focus next week moves to the latest monthly labour market report, minutes of the RBA's December meeting and ABS payrolls data.