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Steepening Theme Spills Into ACGBS

AUSSIE BONDS

Wider moves in core global FI markets were at the fore when it came to ACGBs, leaving YM and XM off worst levels after a foray below their respective overnight troughs, -1.5 & -7.5, respectively. The wider ACGB curve has twist steepened, with benchmarks running 1.5bp richer to 8.5bp cheaper, pulling the 3-/10-Year curve further away from cycle flats.

  • The 3-/10-Year EFP box has twist steepened, putting an end to the recent consistent flattening pressure.
  • Bills sit +5 to -2 through the reds, also twist steepening. RBA dated OIS prices in 43bp of tightening for next week’s decision, little changed on the day, while terminal rate pricing is 5-10bp softer, sitting just below 4.30%.
  • There was no tangible reaction to the slightly firmer than expected domestic retail sales data for August (+0.6% M/M vs. BBG Median +0.4%).
  • Elsewhere, the final Australian underlying deficit for FY21/22 came in at -A$32.0bn, roughly in line with the positive adjustments flagged by the Treasurer in recent weeks, with fiscal headwinds touted once again.
  • Job vacancies data headlines the domestic docket on Thursday.
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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