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Short Squeeze In 3s?

AUSSIE BONDS

We haven’t seen anything in the way of fresh news to trigger the outperformance in the front end of the Aussie curve, with wider core FI trade relatively muted in comparison. Could it be as simple as a short squeeze, with the modest recent richening in U.S. Tsys (in the context of the scale of the wider ’22 cheapening) providing a catalyst for Sydney participants to react to given the aggressive hawkish RBA cash rate track priced into markets and bearish positioning? Perhaps. YM +10.0, with XM +2.0 at typing, as the curve bull steepens. The IR strip has also shunted higher, alongside 3s, trading 3-14 ticks firmer 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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