Richer, But Off Overnight Highs

A lack of notable macro headline flow and tier 1 data releases meant that Aussie bonds didn’t have much to latch onto during Sydney trade, with cash ACGBs running 4.5bp to 15.0bp richer across the curve, bull flattening, as participants adjusted to the latest round of recessionary worry coming out of Europe. YM and XM are +8.0 and +14.5, respectively, sticking to the ranges established during overnight dealing. Bills run flat to 8 ticks richer through the reds, bull flattening.

• The latest round of ACGB Apr-33 supply went smoothly, with the weighted average yield pricing 0.97bp through prevailing mids (per Yieldbroker), as the cover ratio printed at 2.38x, above the 2.00x mark (although a decline from the prev. 3.11x, with the caveat that the prior auction was in Feb, when a different market regime was in place). Wider caution re: the deployment of capital into ACGBs and a lack of outright relative value in the wider sector likely limited broader participation in the auction.
• Thursday will see monthly trade balance data headline the domestic docket.