Sydney Lockdown Extended, ACGBs Well Bid Before That

YM +5.0, XM +9.0 at typing, as Sydney participants build on the overnight bid. Cash ACGB trade has seen a similar degree of bull flattening. 3-Year EFPs have tightened by 3.0bp, reversing yesterday's widening, while the 10-Year EFP is 1.5bp wider on the day.

• A quick look at the open interest data points to fresh shorts driving the YM weakness during Tuesday's session, with that move lower now unwound.
• The weighted average yield pricing through prevailing mids wasn't particularly strong at today's A$1.0bn round of ACGB Jun '31 supply (0.13bp, per Yieldbroker), with the richening to recent lows in outright yield terms and resultant move in the 3-/10-Year yield spread to multi-month flats likely resulting in a less aggressive bidding stance. Still the cover ratio nudged higher vs. the prev. auction of the line, comfortably topping 3.50x.
• Local news flow was dominated by the 1-week extension of the Sydney lockdown, although this was widely expected.
• An address from RBA Governor Lowe and the latest round of scheduled ACGB purchases from the RBA headline locally on Thursday.