Steepening Extends As XM Breaks Overnight Base & AU/U.S. 10-Year Spread Widens

An extension of the steepening/weakness observed earlier in the session, with a lack of headline drivers evident. Cash ACGBs run 2-9bp cheaper across the curve. YM prints -2.0, while XM is -8.0 after the latter extended through its overnight session base, which brings a pure flow element to the fore.

• Building on the flow-centric nature of the move is the fact that the AU/U.S. 10-Year yield spread is showing above 0bp, as Aussie 10s widen vs. their U.S. counterpart (that spread hasn’t closed in positive territory since mid-October).
• Swap flows don’t look to be contributing to the move in bonds, with EFPs flat to narrower on the day, as the 3-/10-Year box flattens.
• There hasn’t been much in the way of meaningful idiosyncratic news flow, with headlines dominated by PM Albanese noting that Foreign Minister Wong will visit China on Tuesday.