AUD Swaps: 10y given after lunch; 3y bid; Box steeper; KfW Kanga tap

Kangaroos
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10y AUD swaps were offered after a strong UST auction. 3y was bid. The EFP box steepened up. KfW has tapped its 5y Kanga bond line.

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  • Futures curve flatter ahead of data

  • Box steeper; 3y bid; 10y given after lunch break

  • New issues – KfW 2028 Kanga tap; Westpac 5y deal

 

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Futures curve flatter ahead of data

Strong 10-year US treasury sale in overnight trading has prompted some demand for longer-dated AUD rates today. 10-year bond future therefore outperformed 3-year and was 2-ticks higher at 95.855 in mid-afternoon Sydney trading. The 3s/10s futures curve was 3bps flatter at 29bps, after steepening to 33.5bps last week.

 

The rally in longer-dated US rates was also backed by players preparing for inflation and retail sales data for August. In Australia, traders were waiting for unemployment data which is due tomorrow.

 

 

Box steeper; 3y bid; 10y given after lunch break

10-year swaps were not busy in the morning but followed the move in the USD rates market after lunch break. A dealer reported receiving there at up to 2bps lower of 4.485% and was last seen changing hands at 4.49%.

 

3-year was bid briefly before mid-day at 1-1.5bps higher before being marked little changed at around 4.075% at time of writing.

 

EFPs were wider across the curve. 3-year was up 0.5bp at 23.5bps, 5-year up 0.25bp at 38.75bps and 10-year up a basis point at 34bps. The 3s/10s EFP box widened out by 0.75bp to 10.75bps.

 

 

New issues – KfW 2028 Kanga tap; Westpac 5y deal

  • Illawarra Credit Union Ltd raised AUD20m via selling September 21, 2026 FRNs that pay AUD 3M BBSW + 170bps.

     

  • KfW added AUD450m to its existing 3.8% May 24 2028 Kangaroo bond line to bring the new size to AUD1.1bn. Priced at 36bps over ASWs and leads are Nomura and MS.

     

  • New York Life sold via DB and NAB AUD450m of 5.35%, September 19, 2028 bonds. Priced at 128bps over ASWs.

     

  • PACCAR Financial Pty Ltd issued AUD300m in 4.5% May 25, 2026 callables with call at par from April 2026. Priced at 100bps over ASWs.

     

  • Volkswagen raised AUD300m via selling the following bonds:

     

    • AUD175m, 5.65%, September 15, 2028.

    • AUD125m, 5.35%, September 15, 2026.

     

  • Westpac Banking Corp self-led AUD2.4bn worth of September 19, 2028 bonds as follows:

     

    • AUD450m, 5%.

    • AUD1.95bn of FRNs that pay AUD 3M BBSW + 93bps.

     

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