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AUSSIE BONDS: ACGBS Richer, Curve Steeper As Yields Make Fresh Lows

AUSSIE BONDS
RegionGlobalBulletAPACFixed Income BulletsAustraliaMarkets

ACGBs (YM +4.0 & XM +0.6) are richer this morning tracking US tsys moves made on Friday with the short-end outperforming. Locally there is little on the calendar today, while trading will be subdued with China, Japan & South Korea all out for public holidays, no cash tsys trading should keep moves limited until London logs in.

  • Equities are set for a cautious session today, with rising tensions in the middle east, another Trump assassination attempt and poor data out of China over the weekend. In the FX space, the AUD has moved slightly higher after the PBoC indicated it will look to step up the fights against deflation and look to implement further measures to support the local economy.
  • Cash ACGBs are 1-4.5bps richer with the 2yr is trading -4.3bps at 3.512%, the 10yr is now -1.6bps at 3.798% both making new cycle lows. The 2s10s is +2.760 at  27.160 while the AU-US 10-year yield differential dropped 2bps this morning to +15bps.
  • Swap rates are 1-bps lower, with the curve is steeper
  • The bills strip is cheaper, with pricing +1 to +3 across contracts.
  • RBA dated OIS firmed slightly on Friday with 21bps of cuts now priced into year-end, up 4bps from Thursday. The Feb meeting is now pricing in 42.5bps of cuts and 100bps of cuts by August 2025
  • Today, the local calendar is empty.
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ACGBs (YM +4.0 & XM +0.6) are richer this morning tracking US tsys moves made on Friday with the short-end outperforming. Locally there is little on the calendar today, while trading will be subdued with China, Japan & South Korea all out for public holidays, no cash tsys trading should keep moves limited until London logs in.

  • Equities are set for a cautious session today, with rising tensions in the middle east, another Trump assassination attempt and poor data out of China over the weekend. In the FX space, the AUD has moved slightly higher after the PBoC indicated it will look to step up the fights against deflation and look to implement further measures to support the local economy.
  • Cash ACGBs are 1-4.5bps richer with the 2yr is trading -4.3bps at 3.512%, the 10yr is now -1.6bps at 3.798% both making new cycle lows. The 2s10s is +2.760 at  27.160 while the AU-US 10-year yield differential dropped 2bps this morning to +15bps.
  • Swap rates are 1-bps lower, with the curve is steeper
  • The bills strip is cheaper, with pricing +1 to +3 across contracts.
  • RBA dated OIS firmed slightly on Friday with 21bps of cuts now priced into year-end, up 4bps from Thursday. The Feb meeting is now pricing in 42.5bps of cuts and 100bps of cuts by August 2025
  • Today, the local calendar is empty.