AUD Swaps: 5-10y well offered after FOMC; late-day 3y trades

Chart up line Oct 2022
5-10y AUD swaps have been well offered after the FOMC decision. 3y has been quiet until some light receiving near market close.

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  • AUD rates market firmer as US Fed signals more tightening

  • Good 5-10y offers; Late-day 3y trades


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AUD rates market firmer as US Fed signals more tightening

The AUD rates market was firmer today, tracking though underperforming the rally in the USD rates market in overnight trading.


On Wednesday, the US Fed hiked benchmark interest rate by 25bps, as had been widely expected. However, Powell said the country’s policy would stay restrictive for some time thus signalled more interest rate hikes to come. This has prompted demand for US treasuries with 10-year yield diving by more than 10bps to below 3.4%.


In mid-afternoon Sydney trading 3-year bond future was up 7-ticks at 96.86, and the 3s/10s futures curve was half a basis point steeper at 37bps.



Good 5-10y offers; Late-day 3y trades

5- and 10-year swaps have been well offered today. A dealer reported busy and good receiving in 10-year since market open when it started off about 5bps lower, which was soon replaced by trades in a tight range about 7bps lower of 4.03% throughout the day. Receiving turned less aggressive in late-afternoon domestic trading and 10-year was last seen changing hands at 4.045%.


5-year traded mostly around 5.5bps lower of 3.745% and was marked around 3.77% at time of writing. 3-year has been quiet on the day with only receiving at about 7-8bps lower near in the afternoon session.


EFPs were tighter to 20-year. Key EFPs were marked as follows: 3-year down 1.75bps at 41bps, 5-year down 0.75bp at 61.25bps, 10-year down 2.75bps at 52.75bps.