A Touch Cheaper

The bias in global core FI markets presented some cheapening pressure for Aussie bond futures in post-Sydney dealing, although XM once again outperformed its U.S. equivalent. The major contracts operate a little above their respective overnight bases, sticking to tight ranges in the early rounds of Sydney dealing as participants look ahead to this week’s key domestic event risk (Q4 CPI due Wednesday). YM is -3.0, while XM is -3.5. Meanwhile, cash ACGBs are 2.5-3.0bp cheaper across the curve.

• Bills run 1-2bp cheaper through the reds, while the major RBA dated OIS measures reside in familiar territory, pricing ~19bp of tightening for next month’s meeting, alongside a terminal cash rate pf 3.55-3.60%.
• All 3 of the major Judo Bank flash PMI readings for Jan resided in contractionary territory, with the collator noting that “Australia’s economy has started 2023 on a softer footing than what we experienced through much of 2022.”
• Meanwhile, the weekly ANZ-Roy Morgan consumer confidence print eased a little, pulling further below the 100 mark in the process.
• Looking ahead, the latest NAB business survey headlines the domestic docket today.