AUD Swaps: 10y given after earlier bid; Aussie borrowers in basis market

Australian Dollars
AUD swaps saw mostly receiving after US jobs data although there was light 10y bid in earlier trading. Aussie borrowers were in the basis market.

Start a free trial to read this article

Join today to access all  Total Derivatives content and breaking news. Already a subscriber? Please Log In to continue reading.

Or contact our Sales Team to discuss subscription options.

Get in Touch
Blurred image of Total Derivatives article content

  • 10y given after earlier bid; Box stays flat

  • Aussies point to direction of travel

  • New issues


Click here for SDR AUD IRS trades


10y given after earlier bid; Box stays flat

A higher-than-expected jobless claim number in the US in overnight trading has backed demand for AUD rates. 3-year AUD bond futures, which managed to tick a tad higher due to a late day rally on the previous day, extended gains today. It was up by 4-ticks before being marked 2-ticks higher at 96.88 in mid-afternoon Sydney trading. The 3s/10s futures curve was 0.5bp flatter at 35.5bps.


Dealers said the hawkish element of the RBA review on the previous day has been completely digested, and traders have mostly been focusing on the US economy especially after yesterday’s jobs data. On the domestic front, inflation data for March that will be released next week will be key for near-term trade direction, according to a market participant. Any upside surprise would add on to the bet for an interest rate hike in May although currently the market expects it to cool from 6.8% to 6.6%.


Flow wise, 10-year swaps were paid up a tad at the open, but were then offered down 2bps lower at 4% after lunch break. 5-year traded in several clips and in a tight range around 3.7175%, or down about 2bps from previous close. 3-year traded down 4bps in the morning session before last seen changing hands 2bps lower at 3.57%.


Key EFPs were tighter with 3-year down 0.25bp at 45bps, 5-year down 0.5bp at 60bps and 10-year down marginally at 52.75bps. The 3s/10s EFP box steepened up marginally from the flattest level since January to just above 7.75bps.



Aussies point to direction of travel

Hedging activities by Aussie borrowers in EUR sparked some turbulence in the basis swaps market on Thursday, including the €650m of 10y from Melbourne toll-road operator Transurban, €1bn, 10y from Sydney Airport and the upcoming 8-10y EUR benchmark from Telstra. For more, see Basis: Aussies point to direction of travel; Gilt hedges



New issues

  • BNG Bank NV raised AUD25m via selling 4.535%, April 28, 2043 bonds at 50bps over ASWs.


  • Citigroup Global Markets self-led AUD20m in April 27, 2035 zeros with annual call options from April 2026.


  • CPPIB Capital Inc sold AUD1.25bn in 4.2%, May 2, 2028 bonds at ASWs + 60bps.


  • IFC added AUD25m to its existing 1.25%, February 6, 2031 Kangaroo bond line to bring the new size to AUD825m. Lead is Nomura.


  • New South Wales Treasury Corp upsized its 2% March 8, 2033 bonds line by AUD125m to aud11.69bn. Priced at ACGBs + 61.75bps.


  • Sydney Airport sold EUR1bn in 4.375%, Mary 3, 2033 bonds at 135bps over mid-swaps with call at par in February 2033.


  • Telstra is planning an 8-10y EUR benchmark.


  • Treasury Corp of Victoria has tapped AUD50m from each the following bond lines:


    • 3% October 20, 2028 at ACGBs + 53bps. The new size is now AUD10.45bn.

    • 5.5%, November 17, 2026 at ACGBs + 54.5bps to AUD10.69bn.