U.S. Tsy Futures Apply Light Pressure To Aussie Bonds

Aussie bond futures tick lower in early trade this week, leaving YM at unchanged levels when compared to Friday’s settlement, while XM is +1.5 after the contracts lodged modest upticks in pre-weekend post-Sydney dealing. There hasn’t been much in the way of meaningful domestic news flow to digest over the weekend, which leaves the early weakness in U.S. Tsy futures in the driving seat at the Sydney re-open. Bills are a touch lower to flat vs. late overnight session levels as a result, with the IR strip running -1 to +1 through the reds.

• The local docket is bare on Monday, although the latest PBoC LPR fixings out of China will provide some interest from further afield (consensus looks for no move in the 1- & 5-Year fixings).
• When it comes to calendar risk, participants are already looking ahead to Tuesday, when we will get the latest address from RBA Governor Lowe, the release of the minutes from the RBA’s June monetary policy meeting and the Bank’s review of its yield targeting mechanism.