AUD Swaps: Swaps turn offered after retail sales data; EFPs in

• Bond futures erase losses after domestic retail sales

• Swaps turn offered; EFPs in

• New issues

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Bond futures erase losses after domestic retail sales

The Australian rates market was weaker at the open, echoing the move in US treasuries in overnight trading.

On Monday, US treasures followed the bear flattening move in bunds after data that showed inflation in Spain quickened unexpectedly in January.

The bond futures then erased all the losses as a knee jerk reaction to domestic data.

Official data released soon after market open showed that retail sales in December was down 3.9% month-on-month, compared to 1.7% of growth in the previous month and economists’ forecast of 0.2% of contraction. It was also the first contraction since December 2021, and the deepest fall since August 2020.

10-year bond future was up by 4-ticks but the momentum has failed to sustain. In mid-afternoon Sydney trading 3-year bond future was up by a tick to 96.81 while 10-year was down by 1.5-ticks at 96.445.

Swaps turn offered; EFPs in

Flow wise, swaps were slightly better bid in the morning. A dealer said although the latest retail sales data suggested that runaway inflation and rising interest rates have started to take a toll on purchasing power, a fall in December has been a pattern so far as Australians have been doing their holiday shopping earlier in the year over the past few years, taking advantage of sales to alleviate the impact of the rising cost of living.

10-year traded up to a basis point higher at 4.145% in the morning before receiving interest emerged around noon time. It then traded down to 5bps lower of 4.085% in the afternoon session before last seen changing hands around 3bps lower. 5-year saw similar move as 10-year. It traded half a basis point higher before the data, and then down to 6.5bps lower of 3.78% in mid-afternoon domestic trading. At the short-end, 3-year was subdued in early-morning, and started off being offered down 1-2bps before receiving turned more aggressive after lunch break. It was last traded 6.25bps lower of 3.5825%.

EFPs were tighter across the curve. Key EFPs were marked as: 3-year down 0.5bp at 42.25bps, 5- and 10-year down 0.75bp at 61.75bps and 55.5bps respectively.  

New issues

• ANZ issued the following bonds:

   

  • EUR1bn, February 3, 2033, paying 5.1101% till the single call at par in February 2028, then EUR 5y swaps + 2.15%. Priced at mid-swaps + 215bps.

  • USD150m, February 6, 2026 FRNs paying USD Overnight SOFR + 75bps. Lead is ML.

   

• Credit Union Australia Ltd raised AUD250m via selling February 9, 2027 FRNs that pay AUD 3M BBSW + 165bps.

   

• IFC added AUD400m to its existing 3.6% February 24, 2026 Kangaroo bonds to bring the new size to AUD1.45bn. Priced at ACGBs + 63.45bps.

   

• NAB issued the following foreign-currency bonds:

   

  • CNY425m in 3.45%, February 21, 2025 Dim sum bonds.

  • HKD728m in 4.25% February 9, 2026 bonds via Mizuho.

   

• Queensland Treasury Corp sold a new AUD1.5bn 4.5% August 22, 2035 domestic bond via ANZ, NAB and Westpac.

   

• Tasmanian Public Finance upsized its existing 2.5%, January 21, 2033 bonds by AUD20m. The new size of the line is now AUD892m.