Tight Ranges In Play Ahead Of Long Weekend & RBA, Curve Steeper

The ACGB space has held onto the twist steepening impetus derived from overnight futures trade, with generally limited activity observed ahead of the long Sydney weekend.

• That leaves YM +1.5 & XM -1.5, with wider cash ACGBs running 2bp richer to 2bp cheaper, pivoting around 7s.
• Bills run -1 to +2 through the reds.
• The 3-/10-Year EFP box has bear steepened, with 3-Year EFP narrower and 10-Year EFP little changed.
• Participants were seemingly unwilling to deploy fresh risk ahead of Monday’s lower liquidity session (which includes the closure of cash ACGBs owing to a NSW & ACT holiday) and Tuesday’s RBA decision (with ~44bp of tightening priced into OIS and 13/17 surveyed by BBG looking for a 50bp hike).
• A lack of meaningful headline flow also limited participation.
• Participants looked through mixed Chinese PMI data, as well as the latest round of domestic private sector credit readings.
• The latest round of ACGB Nov-28 passed smoothly,, while the AOFM weekly issuance slate was fairly vanilla on the ACGB front, albeit with a bit of an upsizing in Note issuance.