A Touch Lower On Bullock’s Comments

It looks like RBA Deputy Governor Bullock stressing the idea that “aggregate household balance sheets are in very good shape,” while flagging that “while housing prices have started falling in recent months, they would have to fall a fair way for negative equity to become a systemic concern” has provided some incremental pressure to the ACGB space, with YM & XM a touch below their respective pre-address levels. YM & XM both deal -6.5 vs. Monday’s settlement levels. Meanwhile, Bills run 4-7bp lower on the day through the reds. Bullock’s address presents no sign of impediments to continued tightening of the RBA’s monetary policy settings, as you would expect based on RBA guidance and the stage in the cycle. Note that Bullock concluded by stating that “while in aggregate it seems unlikely that there will be substantial financial stability risks arising from the household sector, risks are a little elevated,” with risks set to be influenced by the future path of employment growth (which she highlights is strong at present). Focus will now move to the Q&A session that follows the Bullock’s initial remarks.