AUD Swaps: 3-10y bid despite cooling retail sales; EFPs in

Chart line down Oct 2022
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Retail sales for February cooled down but the AUD rates market slumped with paying seen in the 3- to 10-year area. EFPs were tighter.

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  • AUD bond futures slump despite weak retail sales

  • Long-end closed; 3-10y bid; EFPs in

  • New issues

 

Click here for SDR AUD IRS trades

 

AUD bond futures slump despite weak retail sales

The closely watched retail sales data came in as had been expected, down from 1.9% month-on-month in January to 0.2% in February. However, AUD bond futures slumped, as the news about the US authorities considering to expand an emergency lending facility for banks has relieved worries over the collapse of First Republic Bank. This has eased worries over a chain reaction in the banking sector that might eventually lead to a recession.

 

2-year US treasury yields responded by rising by as much as 25bps in the US session on Monday, prompting similar move in the AUD rates market today. In mid-afternoon Sydney trading 3-year bond futures was down 11-ticks at 97.13, and the 3s/10s futures curve was a basis point flatter at 42bps.

 

 

Long-end closed; 3-10y bid; EFPs in

3-year swaps were subdued in the morning session, and paying interest only began to emerge near mid-day. It traded between 3.3925% and 3.395%, or up about 8bps from previous close. Swaps from the 10-year point saw some closing out of prior received positions. 10-year was bid and traded about 7.5bps higher of around 3.925% in the afternoon session.

 

EFPs were tighter across the curve as swaps have been outperforming their underlying cash bonds on the selloff. Key EFPs were marked: 3-year down 1.5bps at 52.5bps, 5-year down 1.25bps at 74.25bps and 10-year down a basis point to 64bps.

 

 

New issues

  • ANZ raised AUD4.25bn via selling the following bonds via itself:

     

    • AUD2.05bn, March 31, 2026 paying AUD 3M BBSW + 83bps.

    • AUD350m, 4.2%, March 31, 2026.

    • AUD1.35bn, March 31, 2028 paying AUD 3M BBSW + 106bps.

    • AUD500m, 4.5%, March 31, 2028.

     

  • NAB self-led AUD250m in March 31, 2024 FRNs that pay AUD 3M BBSW + 48bps.

     

  • Westpac Banking Corp sold via itself AUD250m in March 28, 2024 FRNs that pay AUD 3M BBSW + 48bps.

     

  • Tasmanian Public Finance Corp issued AUD700m in 4%, January 20, 2034 bonds at ACGBs + 88.35bps. Leads are NAB, UBS and Westpac.

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