Off Lows, But Comfortably Cheaper

Aussie bonds sit a little above session lows after cheapening during early Sydney trade, with spill over from the general gyrations in wider core FI markets at the fore on Monday,

• Cash ACGBs run 10.5-12.5bp cheaper across the curve, with the 7- to 15-Year zone leading the weakness. YM is -11.5 while XM is -12.5. Elsewhere, the 3-/10-Year box steepened, while Bills run 1 to 16 ticks cheaper through the reds, bear steepening.
• The latest round of ACGB Jun-51 supply saw no major hiccups, although the cover ratio wasn’t convincing when adjusted for the size of the auction, with overall interest likely limited by well-documented headwinds for demand and inversion in the longer end of the ACGB curve.
• Tuesday’s local docket will see the release of the flash S&P Global PMI readings and weekly ANZ-Roy Morgan Consumer Confidence data. Also, A$150mn of Nov-32 index-linked paper will be on offer from the AOFM.