A Touch Cheaper Vs. Closing Levels

Cash ACGBS sit 2-4bp cheaper in early Sydney trade, with the 7- to 12-Year zone leading the cheapening after futures corrected from best levels in post-Sydney dealing. YM prints -2.0, while XM is -3.0.

• The relatively hawkish round of Fedspeak provided on Monday is no doubt aiding the trajectory, with musings of the same tone from some of the usual ECB suspects also noted. Those comments helped take the edge off of worry surrounding the COVID situation in China, at least when it came to core FI trade.
• Bills run 1-4bp cheaper through the reds, with some light bear steepening in play, aided by the cheapening in ACGBs.
• RBA dated OIS is little changed this morning, with ~21bp of tightening priced for the final monetary policy meeting of ’22, while a terminal cash rate of ~3.85% is currently priced.
• Local news flow has been fairly limited since yesterday’s close. On the state level, Moody’s changed Western Australia’s credit rating outlook to positive, alongside an affirmation of the state’s Aa1 rating.
• The weekly ANZ-Roy Morgan consumer confidence reading has been and gone, with a 1.8% uptick recorded last week. The survey collator noted that the measure “is still at exceptionally weak levels. The increase was mainly driven by the ‘financial situation compared to a year ago’ and ‘financial situation next year’ rising 9% and 2.8% respectively.”
• Eyes are squarely on the COVID situation in China when it comes to Tuesday’s area of Asia-Pac interest.