AUSSIE BONDS: Now A Touch Cheaper
Aussie bonds have ticked into cheaper territory, with U.S. Tsys also a touch cheaper vs. NY closing levels. Domestically, a BBG report which noted that “the first Australian coal shipment to China in more than two years is on the verge of docking” providing a positive news story. Elsewhere, local headline flow has been light. That leaves YM -2.0 & XM -1.0, with the post-RBA cheapening consolidating after participants adjusted to the hawkish tweaks in Tuesday’s post-meeting statement. Cash ACGBs are 1-2bp cheaper across the curve, while EFPs sit around yesterday’s closing levels, suggesting there has been little in the way of impulse from swaps when it comes to ACGBs. Bills now sit flat to -4 through the reds, ticking lower alongside bonds.
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AUSSIE BONDS: Waiting For Cues
Aussie bonds continue to oscillate around neutral levels in early Sydney dealing, with YM & XM last -1.0 apiece, while wider cash ACGBs are essentially flat across the curve. Macro matters have been on the light side thus far, leaving participants on headline & cross-asset flow watch. Bills are flat to +5. Meanwhile, EFPs are a touch lower to flat, with the 3-/10-Year box steepening a touch.
US TSYS: Muted Open
Cash Tsys have opened little changed across the major benchmarks today. TYH3 deals at 114-15, -0-05 around the middle of the narrow 0-03 range observed this morning.
- The space looked through Tokyo CPI data out of Japan, in which the headline and core-core readings ticked up in line with expectations, while the core print provided a larger than expected move higher.
- A thin regional docket for the reminder of the session leaves participants on headline watch.
US TSYS: J.P.Morgan Remain Neutral On Duration, Although Eying Tactical Bearish Step
J.P.Morgan write “Treasury yields look to have outpaced fundamentals during the recent rally and, against a backdrop of light positioning and the tug of war between recessionary concerns and risks of further Fed tightening, we remain neutral on duration with an eye towards turning tactically bearish if yields were to decline materially further from here.”
