Regaining Some Poise

Overnight trade saw Aussie bonds futures stabilise away from their Tuesday lows after regaining some poise into the Sydney close (still finishing comfortably lower Tuesday, in lieu of the well-documented BoJ surprise). Futures are better bid in Sydney trade, after finishing overnight dealing a touch shy of best levels. That leaves YM +9.0 & XM +4.5, while wider cash ACGB trade sees the major benchmarks running 4-9bp richer, with bull steepening in play.

• Bills sit 3-7bp richer through the reds, with some bull flattening in play there, while RBA dated OIS comes in a touch vs. late Tuesday levels, leaving pricing for the Feb ’23 meeting and terminal cash rate at ~3.24% & ~3.70%, respectively.
• The latest Westpac leading index print headlines the domestic docket on Wednesday. However, it will likely be JGB market dynamics that shapes wider core FI trade on Wednesday.