Supply Matters & Election In Focus

The Aussie bond futures curve was happy to bull flatten as core global FI markets richened during post-Sydney dealing, even as the U.S. Tsy curve bull steepened amid growth worries.

• This leaves YM +5.0 & XM +9.0 in early Sydney dealing, roughly in line with late overnight levels but comfortably shy of their respective overnight peaks. Overnight trade saw the space pull back from best levels alongside global core FI counterparts, as U.S. equity markets recovered from session lows during Thursday dealing.
• A$700mn of ACGB Apr-27 supply and the release of the weekly AOFM issuance slate headline on Friday, although there will be plenty of focus on the Federal election that will take place over the weekend. Re: the latter, it isn’t expected to be too much of a market moving event given the lack of meaningful policy differentiation observed between the ruling coalition and opposition Labor Party. The ruling coalition has narrowed the gap to the opposition during the run in, although most projections still point towards a slim majority for Labor when the dust settles (read more on the matter in our full preview of the event:).