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Regional Reaction To ECB & EFP Swap Payside Flow Aids Cheapening

AUSSIE BONDS

Nothing in the way of overt catalysts to explain the light downtick in core global FI markets during the recent rounds of Asia-Pac dealing, leaving us to point to regional reaction to Thursday’s ECB decision as the background driver. YM tested its overnight base on the move, although XM didn’t manage to challenge its own post-Sydney extreme. Both contracts operate a touch off their respective Sydney lows at typing, with wider cash ACGBs running 3.0bp cheaper to 0.5bp richer as the curve twist flattens, pivoting around 20s. EFPs moved a touch wider as ACGBs cheapened, suggesting payside flows in swaps helped the weakness.

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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