AUD Swaps: Busy 10y offers; Futures curve bull-flattens more

• Futures curve bull-flattens more

• Busy and good 10y offers; EFPs out

• New issues

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Futures curve bull-flattens more

The AUD rates curve bull-flattened further today, following similar move in the US market on its first trading day in 2023.

On Tuesday, long-dated US treasuries outperformed shorter maturities with yields at the long-end richening by up to 10bps. 2s/10s USTs flattened out by 6bps.

In mid-afternoon Sydney trading 10-year bond future was up 11-ticks at 96.085, and the 3s/10s futures curve was 5bps flatter at 41.5bps

Busy and good 10y offers; EFPs out

Dealers said the market in Australia has been mostly seeking direction from the US market as the new year started. A trader noticed some closing out of prior positions and there has been good amount of receiving in the most liquid tenors, especially at the longer-end.

10-year, for example, saw busy offered-side flow since market open. It traded in a tight range around 4.43% in the morning session before receiving intensified after lunch break when it traded down to 4.395% intraday. These compared to those traded around 4.515% near market close on Tuesday, or previous close of 4.42%.

Down the maturity spectrum, 5-year was offered down to 4.13% after mid-day, or down about 1.5bps from previous close.

EFPs were wider except those at the superlong-end. Key EFPs were marked as follows at time of writingg: 3-year up 0.5bp at 40.5bps, 5-year up marginally at 64.25, 10-year up 0.75bp at 49.25bps.

New issues

• New South Wales Treasury Corp added AUD550m to its existing 4.75%, February 20, 2035 bonds to bring the new size to AUD2.25bn.

   

  • Treasury Corp of Victoria increased the size of the following existing bond lines:

     

    • Added AUD50m to 2.25%, November 20, 2034 bonds to bring the new size to AUD5.18bn. Priced at 57.5bps over ACGBs.

    • Added AUD150m to 2.25%, September 15, 2033 line to AUD6.7bn. Priced at 40.6bps over ACGBs.