ACGBs Track US Tsys Moves & Trade Cheaper, MI Inflation Next

ACGBs (YM -0.5 & XM -0.4) are cheaper after US tsys yields rose on Friday, tsys futures are little changed this morning ahead of a US public Holiday for Labor day.

• There is a bit on the local calendar this morning, CoreLogic Home values for August were inline with June's at 0.5%, While Judo Bank PMI Mfg was 48.5, down from 458.7 prior. Later this morning we have MI Inflation, Inventories, Company Operation Profit, ANZ-Indeed Job Ads & Building Approvals.
• Friday night in the US, we had PCE increasing 0.2% m/m (0.2% exp, 0.1% prior, 0.155% unrounded), Core PCE increased 0.2% m/m (0.2% exp, 0.2% prior, 0.161% unrounded). Personal Income was 0.3% vs 0.2% expected, Person spending was in line with expectations at 0.50%. MNI Chicago PMI was 46.1 vs 44.8 expected and finally U. of Mich. Sentiment was 67.9 vs 68.1.
• Cash ACGBs curve has flattened slightly this morning, yields are off session highs and trade about 4bps higher across the curve. The 2yr is +4.3bps at 3.707%, while the 10yr nis +3.6bps at 4%
• Swaps are about 1bps higher across the curve.
• The bills strip is 1-4 lower
• RBA-dated OIS is pricing just a 7% chance of a cut in September, and we have softened 1bps heading into year-end with just 18bps of cuts priced in, while pricing has cooled into next year with February pricing in 32bps of cuts down from 35bps on Friday.