At Cheaps Ahead Of RBA Governor Lowe’s Speech

ACGBs (YM -5.0 & XM -4.0) are weaker and near Sydney session lows after July’s trade surplus failed to meet expectations. The July trade surplus printed at A$8.039bn versus expectations of A$10.0bn, with exports down 2.0% m/m and imports up 3.0% m/m.

• Cash ACGBs are 3-4bp cheaper, with the AU-US 10-year yield differential unchanged at -12bp.
• Swap rates are 4bp higher.
• The bills strip has bear steepened, with pricing flat to -8.
• RBA-dated OIS pricing is mixed across meetings. Flat to 1bp firmer out to May’24 and flat to 2bp softer beyond.
• Outgoing RBA Governor Phil Lowe is due to give a speech at 0410 BST / 0110 local time, titled ‘Some Closing Remarks’. Michele Bullock succeeds Mr Lowe on September 18. The speech can be watched here
• (AFR) Treasurer Jim Chalmers says he has been interviewing candidates for the soon-to-be-vacant Reserve Bank of Australia deputy governor job, as he considers potential outsiders for the role. The internal frontrunner for deputy governor is Chris Kent, an assistant governor since 2012 and previously considered a potential future leader of the bank. (See link)