AUD Swaps: Early 5y offers; EFPs wider; Green bonds

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AUD swaps have been bid although there were earlier 5y offers. EFPs are wider. University of Melbourne has launched a green bond offer.

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  • 10y bond future underperforms

  • Early 5y offers; EFPs wider as swaps bid

  • New issues – University of Melbourne Green Bonds


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10y bond future underperforms

10-year AUD bond future has been leading a selloff today, echoing the move in the USD rates market in overnight trading.


US treasury yields rose on Thursday, led by 30-year, after sluggish demand at the 30-year UST auction. The auction results suggested that investors were reviewing their opinion about the pace of the US Fed tightening cycle, as the latest data earlier this week could mean that inflation is peaking.


In mid-afternoon Sydney trading 10-year bond future is down 12-ticks at 96.57, and the 3s/10s futures curve is 3.5bps steeper at 24.5bps.



Early 5y offers; EFPs wider as swaps bid

The AUD swap curve steepened up all the way to the back-end, tracking the move in the USD rates curve. A dealer reported decent amount of paying in 10-uear at up to 3.865% intraday, up from yesterday’s close of around 3.755%. 10-year EFP is 0.5bp tighter at 43.25bps as swaps there have been slightly outperforming the selloff in their underlying ACGBs.


5-year has mostly been bid and is currently marked about 10bps higher at 3.68%, although there were receiving at between 3.53% and 3.55% after lunch break. 5-year EFP widened out by 0.75bp to 49.25bps.


At the short-end, 3-year traded between 3.515% and 3.525% on the day, up from those traded in a tight range around 3.415% on Thursday. 3-year EFP widened out marginally to just above 33bps.



New issues – University of Melbourne Green Bonds

  • Credit Suisse issued via NAB and itself AUD100m in November 20, 2023 FRNs that pay AUD 3M BBSW + 125bps.


  • Macquarie Bank sold via Westpac AUD100m in August 22, 2023 FRNs that pay AUD 3M BBSW + 53bps.


  • Nordic Investment Bank added AUD125m to its existing 2.4%, September 22, 2025 Kangaroo bonds to bring the new size to AUD425m. Lead is JPM.


  • Suncorp-Metway is planning a 3-year MTN offer which could be fixed- or floating-rate notes. Leads are ANZ, Barrenjoey, HSBC, UBS and Westpac. The deal may launch as early as next week.


  • University of Melbourne has launched a 7-year Green Bond offer of size up to AUD200m. Price guidance is 100-105bps over swaps and leads are CBA and HSBC.