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Weakness Extends

AUSSIE BONDS

The overnight/early Sydney weakness in ACGBs has extended, with YM -5.0 & XM -10.0, as the curve steepens, building on yesterday’s move. Wider cash trade sees 5.0-9.5bp of cheapening, with the 10- to 15-Year zone leading the weakness. EFPs are little changed on the day.

  • We also highlight continued underperformance of Aussie 10s vs. their U.S. counterpart (we flagged such cross-market flows as an apparent driver of yesterday’s cheapening move), with the spread between the two consolidating above 0, after the first close in positive territory for that spread since mid-October.
  • The RBA minutes are up next. As we noted earlier, participants will be on the lookout for discussions re: the debate surrounding the size of the latest hike i.e. 25/50bp (the Bank went with 25bp, for a third consecutive meeting), and if there were serious discussions surrounding the potential for a pause in the tightening cycle.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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