AUD Swaps: Late-day 7y bid; Early 10y offers; CAF new 2033 Kanga

10y AUD swaps were given before paying emerged later. 7y saw some late-day paying interest. CAF sold a new 2033 Kanga.

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  • AUD bond futures erase gains in the afternoon session

  • 10y bid after earlier offers; Late-day 7y payers

  • New issues – CAF new 2033 Kanga


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AUD bond futures erase gains in the afternoon session

AUD bond futures were firmer in the morning, tracking but underperforming the rally in the USD rates market in overnight trading.


On Wednesday, US treasury yields extended their downtrend after dovish comments from two US officials. Fed Governor and vice chair nominee Philip Jefferson said any decision to hold rates steady should not be viewed as the end of the tightening cycle, indicating that there could be a “hawkish pause” in the next meeting. Philadelphia Fed’s Harker, on the other hand, said the US Fed should skip a rate hike when the board next meets. The market quickly priced in such comments, with the OIS falling to session low of 5.17% or taking away about 9bps worth of rate-hike premium.


3-year bond future was up by 3-ticks intraday, but erased all the gains to mark 5-ticks lower at 96.6 in the afternoon session. The 3s/10s futures curve steepened up by 1.5bps to 25.5bps. Dealers said the selloff was mostly driven by players exiting ahead of the US jobs data that is due tomorrow.



10y bid after earlier offers; Late-day 7y payers

The rally in the underlying cash bond market saw some light activities in 10-year. A trader noticed slightly better receiving in the morning when it traded between 4.0825% and 4.0875%, down from those traded around 4.11% near market close on the previous day. 10-year then turned better bid and was last traded at 4.1425%. Slightly down the curve, 7-year traded in a tight range around 3.985% near market close, up from previous close of around 3.945%. 5-year went through down to 3.5bps lower of 3.815% around mid-day.


EFPs were mostly tighter with 3-yead down a basis point to 37.25bps, 5-year little changed at 47.25bps, 10-year down 0.75bp at 64.25bps.



New issues – CAF new 2033 Kanga

  • Corporacion Andina de Fomento (CAF) raised AUD70m via selling new 4.5%, June 7, 2033 Kangaroo bonds at 103bps over ASWs.


  • New South Wales Treasury Corp added AUD50m to its existing 1.5%, February 20, 2032 bond line to bring the new size to AUD11.61bn. Priced at ACGBs + 33.1bps.