ACGBs Pressured, RBA Speak & Supply Matters In Focus

Aussie bonds turned a bit heavy after RBA Dep Gov Debelle outlined Australian central bank's policy options, which included bond purchases further out along the yield curve, trimming interest rates without going negative, negative interest rates and FX intervention, albeit Debelle was quick to cast doubt on the effectiveness of the last two measures. The official signalled that the RBA considers its options to best support the economy, but stopped short of communicating any sense of urgency to deploy them, or indeed of offering any clues on timing. Subsequent Q&A session saw Debelle highlight that being an option does not mean being on the table, as he sought to convince the audience that his rhetoric did not deviate from what we had already heard from RBA Gov Lowe. YM -0.5 & XM +0.5 as we type, both hovering near their session lows. Cash ACGB curve has twist flattened, as Debelle's comments pushed it higher, with yields last seen +0.9bp to -1.2bp. Bills trade unch. to -1 tick through the reds. On the supply front, the AOFM launched the syndication of a new 0.50% 21 September 2026 Treasury Bond and auctioned A$150mn worth of 2.00% 21 Aug '35 linkers.

• It was much quieter in terms of general news flow, with Japan still off for a national holiday. T-Notes wavered within a tight 0-02 range and last trade unch. at 139-18. Cash Tsys remain closed until the London open. Eurodollar futures sit -0.5 to +0.5 tick through the reds. Existing home sales, 2-Year Tsy supply, comments from Fed's Evans, Barkin and Bostic, as well as a parliamentary testimony from Fed Chair Powell & U.S. Tsy Sec Mnuchin take focus in the U.S. today.