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

 

Click here for SDR AUD IRS trades

 

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.

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