Off Worst Levels, Little Movement On Encouraging Sino-Aussie Headline Flow

Aussie bonds prove fairly unreactive to the latest round of comments pointing to a further thawing of Sino-Aussie relations (see earlier bullet for more colour on that matter), seeing an incremental uptick post-headlines, but they were already moving away from cheapest levels of the day alongside U.S. Tsys. That leaves YM -11.0, while XM is -9.0, with wider cash ACGBs running 6-11bp cheaper across the curve, as the early bear flattening bias is maintained.

• Note that Aussie 10s have outperformed their U.S. counterpart in the time since Friday’s Sydney close, given the impulse derived from U.S. data & Fedspeak (and WSJ Fed report Timiraos’ latest article), with the spread between the two compressing by a little over 8bp.
• Bills are 5-14bp cheaper through the reds.
• EFPs continue to operate around session wides.