Steeper On U.S. Tsy Direction

Aussie bonds steepened with XM trading as much as 6.0 ticks lower vs. settlement before edging away from worst levels, having unwound all of the gains it saw in the wake of RBA Governor Lowe's October 15 address as weak longs get flushed out on the impetus from the U.S. Tsy space. YM -1.0, XM -4.5 at typing.

• The latest ACGB '26 auction was solid, although the cover ratio wasn't particularly standout by recent standards (~4.50x), but the pricing was strong, with average yields stopping ~0.9bp through prevailing mids at the time of supply (per BBG prices).
• October's flash CBA PMIs saw the rate of expansion in the composite reading accelerate, driven by an uptick in the services metric, while the rate of expansion witnessed in the manufacturing sector slowed at the margin.
• Bills sit 1-2 ticks softer through the reds.