Aussie bonds more than unwound the overnight cheapening observed in futures, with the initial firming coming on the back of a softening for Chinese tech equities (which later pulled back from extremes). The space then caught a further bid as a speech from AOFM CEO Nicholl (link here) saw the Agency shelve a plan to establish new ACGB ‘43 or ‘44 maturities. The space has backed away from best levels since Nicholl stopped speaking.
- That leaves cash ACGBs running 3.0 to 5.5bp richer across the curve with 2s outperforming, while YM and XM deal +3.0 and +3.5, respectively. EFPs are essentially unchanged on the day.
- Bills sit -1 to +3 through the reds, twist flattening. Retail sales data headlines Wednesday’s domestic docket.