AUD Swaps: Paying eases after lunch break; GDP beats forecast

• Bond futures dip more after domestic data

• Paying eases after lunch break

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Bond futures dip more after domestic data

AUD bond futures were flat to a touch weaker, tracking but outperforming the selloff in the USD rates market in overnight trading, which was weaker amid renewed concerns over the inflation situation there.

3-year bond future was down up to 4-ticks intraday soon after domestic data.

Official data released today showed that 2Q GDP in Australia was up 2.1% year-on-year, down from 2.4% in the previous period but beating economists’ forecast of 1.8%. On a quarterly basis, the growth was unchanged at 0.4%.

Bond futures trimmed losses after lunch break as the effect of domestic data was very short-lived. 10-year was even up half a tick in mid-morning domestic trading before being marked a tick lower of 95.86 in late-afternoon domestic trading. The 3s/10s futures curve was half a basis point flatter at 32.5bps.

Paying eases after lunch break

10-year swaps were paid up 2.5bps at 4.505% before domestic data. Price action there saw 10-year swap rate going up to above 4.52% intraday before trading activities resumed when 10-year traded 0.5-0.75bps higher in the afternoon session.  

3-year traded up to a basis point higher of 4.0475% in the morning. Interest from the other side of the fence emerged in the afternoon session and 3-year went through flat to 2.75bps lower.

EFPs were mostly tighter with some mild widening at the backend. Key EFPs were marked as: 3-year down marginally at 23.25bps, 5-year down 0.5bp at 39.75bps, 10-year down 1.5bps at 33bps.