AUD Swaps: 3y bid as RBA hikes again; Early 10y offers; ANZ, Macquarie USD bonds

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Some Australian players were caught off-guard by RBA's 25bps hike today, prompting some paying in 3y AUD swaps. ANZ and Macquarie USD bonds in size.

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  • Bond futures erase gains after RBA’s surprising hike

  • 3y bid after RBA; Early 10y offers

  • New issues – ANZ, Macquarie USD bonds in size; CBA in CHF

 

Click here for SDR AUD IRS trades

 

Bond futures erase gains after RBA’s surprising hike

The RBA hiked the country’s benchmark interest rate by 25bps to bring the rate to its 11 years high of 4.1%. A significant portion of the market players was caught off-guard as they didn’t expect the hike to resume right after the central bank’s pause in May.

 

3- and 10-year bond futures were up a few ticks in the morning but fell sharply after the announcement. 3-year was down by 13-ticks before being marked 9-ticks lower at 96.34 in mid-afternoon Sydney trading. The 3s/10s futures curve flattened out by 4.5bps to 17.5bps, approaching levels around 15.5bps that the market saw in late-September.

 

 

3y bid after RBA; Early 10y offers

Apart from the surprise about the policy move, the central bank also sounded “aggressively” hawkish again, according to a swap source. It said further tightening of monetary policy may be required given recent inflation trend and the tightness in the labour market. The central bank also saw a narrow path to achieving soft landing although growth in Australian economy has slowed and that inflation had likely peaked though still too high.

 

The reaction in the swap market has been calmer. Another market participant reckoned most of the swappers were ready for a hike after recent inflation and minimum wage data. “Some of them had already positioned for this so-called surprise,” he said.

 

10-year swaps were offered down to 4.19% before RBA, compared to those traded around 4.26% near market close on the previous day. 10-year was last seen changing hands at 4.2%, tightening EFP there by 3bps to 44.5bps. 3-year saw more RBA-linked flow. Another player noticed paying there at up to above 3.98%, compared to those traded up to around 3.93% in overnight trading. 3- and 5-year EFPs were 2.5bps and 5.25bps tighter at 31.75bps and 38.75bps respectively.

 

 

New issues – ANZ, Macquarie USD bonds in size; CBA in CHF

  • ANZ raised USD1.35bn via selling 4.675% June 15, 2026 Reg S/144A covered bonds at USTs + 55.8bps

     

  • CBA sold CHF300m in 1.94% June 2026 bonds at MS + 16bps. Leads are DB and UBS.

     

  • Macquarie Bank issued USD1.45bn worth of Reg S/144A bonds as follows:

     

    • USD750m, June 15, 2034 paying 5.887% till the call at par from June 2033, then USD SOFR + 238bps.

    • USD700m, 5.208%, June 15, 2026 at USTs + 110bps.

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