Swaps - AUD
The long-end of the AUD rates curve saw good paying after a steepr US curve, which is in turn due to curve steepener trades.
The flow of JPY equity-linked Uridashis has slowed while foreign borrowers are still bringing issues in the Kangaroo and Kauri markets in Australasia.
The 10y ACGB yield has pushed above 1% and there has been trade in swap butterfly spreads. Yesterday's growth report flagged a looming recession.
Spreads have dipped more negative as the sell-off has spurred more flow in swaps and forwards. The RBA held steady. The curve is seen bear steepening.
The AUD 3s/10s box has inverted further on long-end offers. The RBA rates announcement is awaited amidst discussion about the longevity of the ELB.
Light long-end AUD offers have pushed the 3s/10s box spread more negative. Key events this week include ACGB supply, the RBA rates call and GDP data.
Data from the US has prompted a mild selloff in AUD rates. The 5- to 10-year area saw good paying but 10-year EFP is more inverted.
AUD rates price action has been lacking but there has been flow in curve spreads and forward swaps. The RBA has again ruled out negative rates.
There has been trade in short AUD forwards, with levels having risen recently. The coming month-end extension is expected to impact the long-end.
The widening push in AUD swap spreads has slowed as EFPs have reached zero but the 3s/10 box is expected to invert again. BPCE launched a 5y bond.