AUD Swaps: Bond futures extend losses; Paying eases after lunch break
- AUD bond futures extend losses
- Swaps bid eases after lunch break
- New issues
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AUD bond futures extend losses
AUD bond futures extended losses on Friday, following a surge in US treasury yields which resulted in 2- to 30-year yields all above 4%. The move in the US market was triggered by a smaller-than-expected jobless claims data which subsequent reinforced the market’s outlook on more US Fed hikes to come.
In mid-afternoon Sydney trading 3- and 10-year bond futures were down 4-ticks at 96.38 and 96.095 respectively, leaving the 3s/10s futures curve unchanged at 28.5bps.
Swaps bid eases after lunch break
Trading in swaps has turned less active ahead of the weekend and before the RBA monetary policy meeting early next week. A dealer reported paying in those more liquid tenors with stronger paying interest near market open. Bid-side flows have been backed by the market’s expectation about a hawkish RBA too, according to the source.
3-year swaps, for example, were paid up 5.5bps higher of 4.09% early in the morning before being traded in a tight range around 4.0525% later on. It was last traded around 4.08%, widening EFP there by 0.25bps to 45.25bps.
Slightly up the curve, 5-year went through 8bps higher before last traded 4.5bps higher at 4.24%. 10-year has been relatively busier with paying at up to almost 8bps higher in the morning. Paying in 10-year eased after lunch break and it was last changing hands 4.25bps higher of 4.4725%. 5- and 10-year EFPs were 1.75bps and 0.5bp wider at 63bps and 58.25bps respectively.
- ANZ sold via Mizuho HKD762m in 4.85%, March 10, 2026 bonds.
- Banco Santander SA issued AUD375m in 5.678% March 9, 2028 Kangaroo bonds at ASWs + 160bps.
- CBA self-led AUD30m in 5.494% March 9, 2033 bonds.
- IFC added AUD100m to its existing 3.2% July 22, 2026 Kangaroo bonds to bring the new size to AUD1.45bn.
- Westpac Banking Corp issued via ANZ CNY110m in 3.5%, March 10, 2026 Dim sum bonds