AUD Swaps: Paying eases after mid-day; EFPs wider beyond 10y

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AUD swaps have been bid ahead of the US debt-ceiling talks. Paying eased a tad after lunch break and EFPs were wider the 10y point.

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  • Bond futures down despite weak consumer confidence

  • Paying eases after lunch break; EFPs wider beyond 10y

  • New issues


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Bond futures down despite weak consumer confidence

The USD rates market was weaker on Monday and such sentiment has spread to Australia. As such, AUD bond futures were weaker despite a weak result of Westpac Consumer Confidence Index, which contracted by 7.9% month-on-month in May after 9.4% of growth in the previous month.


3-year bond future was down by 8-ticks in the morning before trimming losses around mid-day after the release of the minutes of the May RBA meeting which did not sound excessively hawkish following the surprising interest rate hike. In mid-afternoon Sydney trading 3-year bond future was marked 2-ticks lower at 96.88. The 3s/10s futures curve was 2bps flatter at 31bps.



Paying eases after lunch break; EFPs wider beyond 10y

The swap market began to see busier flow today. 3-year has seen some reasonable amount of paying since mid-morning domestic trading. It traded about 5bps higher in the morning but paying eased after lunch break. It was last seen changing hands 0.5bps higher of 3.505%.


Slightly up the curve, 5-year went through up to 3.67% in the morning, but only traded briefly at 0.5bp higher of 3.63% in the afternoon session. 10-year has been relatively busier. It traded in a tight range around 4bps higher of 3.985% in earlier trading before going through mostly around 3.95% in after mid-day.


EFPs were tighter at the shorter-end but wider beyond the 10-year point. Key EFPs were marked as: 3-year down 0.5bp at 38.75bps, 5-year down 0.75bp at 50.75bps, 10-year unchanged at 51bps.



New issues

  • Australia Pacific Airport issued via BNPP, Citigroup and GS EUR500m in 4.375% May 24, 2033 with single call at par in February 2033.


  • New South Wales Treasury Corp added AUD100m to its existing 4.75% February 20, 2035 bonds to bring the new size to AUD6.85bn.


  • Westpac Banking Corp sold USD1.75bn in 4.184%, May 22, 2028 Reg S/144A bonds ab +72bps.