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Rolling Down Into The Weekend

AUSSIE BONDS

Spill over from yesterday's RBA commentary, in addition to a stellar ACGB auction and Westpac expressing greater conviction re: imminent RBA easing, supported the Aussie bond space in Sydney trade. YM +0.5, XM +2.5, with the latter well off its SYCOM highs owing to the move in Tsys in NY trade.

  • In terms of auction specifics, it looks like the hunt for exposure to rolldown towards the 3-Year benchmark outweighed any desire to hunt out the broader flattening impetus, with the cover ratio surging above 7.00x at the latest ACGB Nov '24 auction, while average yields priced ~0.8bp through prevailing mids at the time of supply.
  • The AOFM's weekly issuance schedule provided no real talking points.
  • As we flagged earlier, local news flow continues to be dominated by Sino-Aussie tensions, with ABC sources noting that "mills in China are being told to stop buying Australian cotton as speculation grows that a hefty tariff is about to be slapped on the trade." Further details on that matter can be found in an earlier bullet.
  • Bills -1 to +1 through the reds.
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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