Twisting Flatter Overnight

Aussie bond futures saw some twist flattening overnight, following the gyrations witnessed in the U.S. Tsy space. That left YM -0.5 and XM +1.0 come the close of after-hours dealing.

• Outside of the continued focus on local COVID dynamics Thursday will see the release of the latest weekly ABS payrolls data and the monthly trade balance reading. The RBA will also conduct its latest round of scheduled ACGB purchases.
• As a reminder, late Wednesday saw the release of a WSJ interview with RBA board member Harper. Harper fleshed out the expected fall in GDP during Q3 but pointed to the RBA base case of a swift snapback once COVID-related restrictions pass. The WSJ piece went on to note that "with plenty of stimulus already in the economy, there wasn't a strong case for the RBA to suspend plans to taper its government bond buying this week, he said"…"The impact of that would have hit at precisely the moment the economy was already recovering quickly. All you would be doing is pouring lots of fuel into an open carburetor." "You can't fine-tune these things," he added. "Monetary policy isn't switched on and off like that." The interview also noted that "still, if the economy weakens alarmingly, the RBA has scope to increase bond buying in that scenario, Mr. Harper said."