AUD Swaps: RBA minutes due; Light 3-10y bid; Box steeper

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3- and 10-year AUD swaps saw light paying in cautious trades, ahead of the release of the RBA meeting minutes. The 3s/10s EFP box steepened up.

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  • 3y bond future erases gains

  • Light 3-10y bid as players cautious ahead of RBA minutes

  • New issues


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3y bond future erases gains

AUD bond futures rebounded at the open, but 3-year erased all the earlier gains to mark 3-tick lower at 96.46 in late-morning domestic trading as players were still worried about further RBA monetary tightening especially after stronger-than-expected data from the UK on Friday, or a day after some strong US PPI data. On top of that, China decided earlier today to keep its 1- and 5-year loan prime rate unchanged after injecting cash in size into the market on Friday. “It is hinting no interest rate cut. The PBOC will likely just keep on pumping cash into the system,” a dealer said.


10-year was up half a tick at 96.185, and the 3s/10s futures curve was 3.5bps flatter at 28bps.



Light 3-10y bid as players cautious ahead of RBA minutes

Trading in swaps has been subdued as the US market is closed today for bank holiday. Players have now turned their focus on the minutes from the RBA Board’s February meeting, and ANZ said in a research piece released today that risks around RBA pricing are skewed to the upside this week.


Flow wise, a dealer reported light 3-year bid since late-morning domestic trading, and it traded up to 1.75bps higher of 3.9575% after lunch break. 10-year was very quiet in the morning session, and trading interest only emerged near mid-day when it traded up to 3.5bps higher of 4.365%.


EFPs were mostly wider except for 5-year where it was down 2bps at 57.5bps. 3- and 10-year EPFs were flat and a basis point wider at 42.5bps and 54.5bps respectively, steepening the 3s/10s EFP box by a basis point to 12bps.



New issues

  • Aurizon Network raised AUD80m via selling 6.392%, December 21, 2032 bonds.


  • Queensland Treasury Corp added AUD29.7m to its existing 2%, August 22, 2033 bonds to bring the new size to AUD3.11bn.