Softer To Start

The bearish impetus observed in the wider core global FI space led Aussie bond futures lower in post-Sydney dealing ahead of the weekend. YM is -7.0 and XM is -7.5 at typing, with the former testing its overnight base and the latter through its own post-Sydney trough as core global FI markets start the week on the backfoot. Bills are 1-7bp cheaper through the reds, bear steepening.

• The weekend saw Australian PM Albanese underscore the government’s focus when it comes to fighting inflation, although there wasn’t anything of any real note for markets in the interview. He also warned against the challenge of a “forward-leaning China.”
• A$300mn of ACGB Jun-51 supply headlines the domestic docket on Monday (more on that in our auction preview that will cross later today).
• Further afield, the monthly Chinese LPR fixings headline the Asia-Pac docket (10bp cuts to both the 1- & 5-Year fixings are the consensus view after last week’s surprise 10bp cuts in the interest rates applied to the 1-Year MLF & 7-day reverse repo operations).
• Looking ahead, there isn’t anything of any real note on this week’s domestic docket, with the annual central banker gathering in Jackson Hole (Thursday-Saturday) set to garner most of the wider market attention in the coming days.