Wider Matters At The Fore

There once again seems to be a lack of idiosyncrasies when it comes to movements in the Aussie bond space, with the space trickling lower over the last few hours. The likely swap-paying driven sell off in U.S. Tsys and a reversal in oil futures (which now trade comfortably lower after initially moving higher on the day, resulting in a downtick in stagflationary worry) has pressured the space away from best evels. That leaves YM +2.0 and XM +3.0, with the longer end of the cash curve richening by ~4.5bp on the session. Note that EFPs have ticked back towards neutral levels, perhaps on spill over from the swap payside flows flagged in the U.S. space.