Slide Continues

Aussie bonds continue to slide, leaving YM -13.0 and XM -8.0, while wider cash ACGBs run 8-13bp cheaper as the curve bear flattens. Participants are likely reacting to a combination of the late NY weakness in Tsys (with fresh selling seen there in early Asia trade) and gearing up for a potentially hawkish round of underlying CPI forecasts in the RBA’s SoMP when it crosses at the bottom of the hour (a reminder that Tuesday’s post-meeting statement revealed that Bank does not see headline inflation returning to the upper end of its 2-3% target band until ’25). The latter is seemingly the driver behind the widening of AU/U.S. yield differentials so far today. Also note that the ACT has mandated for a new Oct-34 benchmark bond, which is set to price on Monday.