Twist Flattening

ACBGs edged away from cheapest levels witnessed after the release of firmer than expected NZ inflation data as we worked our way through the Sydney day, with an uptick in U.S. Tsy futures on previously fleshed-out reactions to Friday’s market moves, Fed expectations and developments in China’s ongoing COVID outbreak lending support to the space. The cash ACGB curve has twist flattened, with the major benchmarks running 0.5bp richer to 5.0bp cheaper across the curve, pivoting around 20s. YM and XM are -2.5 and -1.5, a little below their respective session highs but getting nowhere near to challenging the boundaries of their overnight ranges, while bills run 2 to 5 ticks cheaper through the reds, bear steepening.

• Looking ahead, Tuesday will see the RBA release the minutes of its Jul policy meeting, with a speech by RBA Deputy Gov Bullock (on “How are Households Placed for Interest Rate Increases?”) due to cross after the minutes.