AUD Swaps: Front-end flow in cautious trade ahead of domestic CPI

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Trading in swaps has not been busy as players were cautious ahead of the domestic CPI data. Swappers noticed light flow at the front-end.

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  • Light 1y offers in cautious trade ahead of domestic CPI

  • New issues – ANZ launches 2y USD benchmark deal


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Light 1y offers in cautious trade ahead of domestic CPI

3-year bond future has been leading a rally today, as weak data from France and Germany on Friday has triggered concern over an economic recession there, together with a potential one in the US due to excessive interest rate hike.


In mid-afternoon Sydney trading 3-year bond future was up by 6-ticks at 96.09. The 3s/10s futures curve was marked 5.5bps, or 4bps steeper from its record low of 1.5bps on Friday.


The focus this week in Australia is the release of domestic inflation data on Wednesday. ANZ said in a research piece on Monday that it had a short bias for both USD and AUD rates this week. “Between the Federal Reserve’s hawkish messaging and only  one more rate rise being priced in, we think there will be a larger reaction to an upside surprise,” it explained. In Australia, the larger market reaction would come from a stronger-than-expected print as July and/or terminal pricing gets pushed higher, according to ANZ.


Trading in swaps has been very subdued with a couple of trades in 1-year between 4.56% and 4.565%, down from Friday’s close of near 4.62%. Price actions in other tenors saw 3-year down by 9bps intraday before currently marked around 7bps lower at 4.26%, steepening 3s/10s swaps by 0.5bp from their historic low of 11.75bps to 12.25bps.


EFPs were mixed but the key ones were mostly a tad wider. 3- and 10-year were up marginally at just above 35.5bps and 43.75bps respectively, 5-year was up 0.5bp.



New issues – ANZ launches 2y USD benchmark deal

  • AGI Finance issued via ANZ AUD400m in 6.109%, June 28, 2030 bonds.


  • ANZ has launched a USD-denominated 2-year benchmark fixed- and floating-rate bond deal. The fixed-rate tranche is expected to price at around +90bps area, while the 144A/Reg S floating-rate tranche will be paying SOFR equivalent.


  • ICBC Sydney branch sold via BOC CNY159m in 2.5%, June 28, 2024 Dim sum bonds.


  • IFC added AUD75m to its existing 1.25%, February 6, 2031 Kangaroo bond line to bring the new size to AUD975m. Leads are Daiwa and TD Securities.