AUD Swaps: Light swaps bid; Box flattens more

Flat tarmac 21 Jun 2021
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AUD swaps saw light paying as players were cautious head of domestic inflation data. The 3s/10s EFP box flattened more.

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  • Light swaps bid; Box flattens more

  • New issues – CAF 5y Uridashi, IFC kanga tap

 

Click here for SDR AUD IRS trades

 

Light swaps bid; Box flattens more

AUD bond futures extended losses today, following hawkish comments from the ECB Chief who said in overnight trading that another rate hike would be appropriate, and amid further selloff after strong China GDP data which was out yesterday.

 

In mid-afternoon Sydney trading 3-year bond future was down 6-ticks at 96.88, and the 3s/10s futures curve was 1.5bps flatter at 40bps.

 

A dealer said the minutes of April meeting released on Tuesday has prompted some players to believe that the central bank would resume hiking rates in May. According to the minutes, the RBA discussed a 25bp hike before finally deciding a pause in April. It also stressed that further hikes would be needed. However, most players prefer to wait until the domestic inflation data which will be released next week. This will provide a strong evidence if the RBA should hike or to pause.  

 

Trading in outright swaps has been subdued with light paying in 10-year in the morning session at up to 4.075%, or up from previous close of around 4.035%. 5-year has been relatively busier and traded in a tight range around 4bps higher of 3.775%.

 

EFPs were mostly tighter with 3-year down 1.25bps at 46.75bps, 5-year down 1.75bpps at 64bps, 10-year down 1.75bps at 54.75bps. The 3s/10s EFP box, which steepened up marginally on the previous day, resumed its flattening move today and was marked 0.75bp flatter at 7.75bps at time of writing. It was also the flattest since early-March and some players had tipped a steepening move there to come.

 

 

New issues – CAF 5y Uridashi, IFC kanga tap

  • Corporacion Andina de Fomento (CAF) issued via SMBC Nikko AUD61.5m in 4.28%, April 19, 2028 Uridashi bonds.

     

  • IFC priced an AUD25m increase to its existing 1.25%, February 6, 2031 Kangaroo bond line to bring the new size to AUD800m. Lead is Nomura.

     

  • Stockland Trust sold AUD250m in 5.45%, April 26, 2030 bonds with make whole calls at 42.5bps before calling at par in January 2030. Priced at ASWs + 170bps and leads are ANZ, NAB and Westpac.

     

  • Transurban Finance Co raised EUR600m via selling 4.225% April 26, 2033 callables with make whole call at 30 until call at par in January 2033. Priced at mid-swaps + 176.4bps and leads are BNPP, BofA and SG.

     

  • Treasury Corp of Victoria added AUD45m to its existing 5.5% November 17, 2026 bond line to bring the new size to AUD10.64bn.