AUD Swaps: Light 5-10y offers ahead of CPI; Sovereign Green bond program

Big green tree 1 Feb 2021
AUD swaps saw clearer receiving interest after lunch break and the box steepend up. Australia will launch sovereign Green bond program in mid-2024.

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  • Light 5-10y offers ahead of CPI; EFP Box steeper

  • Australia to have sovereign Green bond program in mid-2024

  • New issues – NTTC new 2035 bonds


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Light 5-10y offers ahead of CPI; EFP Box steeper

AUD bond futures were down by 3- to 4-ticks in the morning session, tracking the move in the USD rates market on Friday. They have trimmed losses since mid-day with 10-year up by up to a tick in the afternoon session. At time of writing, it was up by 0.5-tick, and the 3s/10s futures curve was 1.5bps flatter at 35bps.


Trading in swaps has not been busy ahead of the March CPI data which will be released on Wednesday. Consensus is to see inflation cooling from 6.8% in February to 6.5% in March. Traders were also not aggressive in the holiday-shortened week this week as the market will be closed tomorrow for bank holiday. Some players have taken today off for an extended long weekend too.


Nevertheless, a dealer reported some light flows around the more liquid tenors. Echoing the move in the underlying ACGBs, swaps saw some light paying in the morning before some clearer receiving after lunch break. 10-year, for example, traded at 4% in the morning before being offered down to 3.965% in the afternoon session. These compared to those traded around 3.995% near market close on Friday. 5-year has been subdued in earlier trading before traded around 2bps lower of 3.7% in early-afternoon domestic trading.


EFPs were tighter across the curve with 3-year down 1.5bps at 43bps, 5-year down 1.25bps at 57.75bps and 10-year down 0.75bps at 51.75bps. The 3s/10s EFP box, which stayed at levels below 8bps most of the week last week, steepened up by 0.75bp to 8.5bps.



Australia to have sovereign Green bond program in mid-2024

Australian Treasurer Jim Chalmers announced on Friday that the country would introduce sovereign Green bond program in mid-2024. The program will be managed by the AOFM. The government will also provide AUD4.3m to crack down on businesses making misleading claims about the sustainability of efficiency of their produces.



New issues – NTTC new 2035 bonds

  • Northern Territory Treasury Corp raised AUD650m via selling new 4.5%, March 21, 2035 bonds at 99.6bps over ACGBs.


  • Queensland Treasury Corp added AUD to its existing 4.5% March 9, 2033 bond line to bring the new size to AUD3.5bn. Priced at 62.6bps over ACGBs.