Off Lows

Further weakness in e-minis and a subsequent bid in the U.S. Tsy space has provided support for Aussie bond futures, which were already relatively resilient in early Sydney trade, perhaps representing a degree of cross-market demand vs. the likes of U.S. Tsys. YM is back to unchanged levels as a result, while XM is -6.5 on the day.

• The cash ACGB curve has twist steepened around the 3-Year point, with a fairly parallel shift observed in the 10+-Year zone.
• EFPs have narrowed, with the 3-/10-Year box flattening.
• The front end of the IR strip has led the bid there, with those contracts running 1-8 ticks firmer on the day. Meanwhile, the IB strip has seen a modest reduction (3-8bp dependent on contract) of RBA tightening expectations.
• Chinese trade data is eyed as the major regional risk event during Asia-Pac hours.