The Sell Off Deepens

Once again, dynamics in the U.S. Tsy market drove the Aussie futures curve steeper during SYCOM trade, although XM has recovered from its overnight lows to last trade -3.0, while YM sits at unchanged levels. We should flag that the implied yield on the XM contract now sits above 1.00%. This area has generally been seen as a zone to build longs in previously, however positioning and U.S. Tsy dynamics continue to garner interest and may present some headwinds this time out. Looking to the shorter end of the cash curve, ACGB 2.75% April '24 is yielding ~0.12%, still close enough to the RBA's YCC target but approaching levels that has seen the Bank step in to enforce its target in the past.

• Bills sit unchanged to -1 through the reds.
• Locally, trade balance & housing finance data is due for release on Thursday. The latest round of RBA QE purchases is also due.