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Retail Sales & Chinese Unrest Provide Support

AUSSIE BONDS

The modest extension of the defensive tone in equity markets, linked to the reports of social unrest in China re: COVID restrictions, and softer than expected domestic retail sales data has supported Aussie bonds, allowing them to tick higher vs. early Sydney levels. That leaves YM +1.0 & XM -0.5, with the cash ACGB curve pivoting around the 10-Year zone as the major cash ACGBs run 1.5bp richer to 1.5bp cheaper, twist steepening.

  • A quick reminder that the RBA has highlighted the reaction of household consumption to tighter financial conditions as a key input for interest rates moving ahead. In that sense, today’s soft data release vindicates the step down of the pace of hikes to 25bp in recent months.
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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