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AUSSIE BONDS: Cheaper After The US Tsy Curve Bear-Flattens

AUSSIE BONDS
RegionGlobalBulletAPACFixed Income BulletsAustraliaMarkets

ACGBs (YM -3.0 & XM flat) are cheaper after a bear-flattening by US tsys following Fed Chair Powell’s remarks at the NABE conference.

  • The remarks were taken hawkishly by markets with Powell stressing the Fed is not in a hurry to cut rates, emphasising that the overall US economy remains on solid footing.
  • The US 2-year rate was up 8bps to 3.64%, while the 10-year was 3bps cheaper at 3.78%. The curve flattened to 14.7 bps.
  • US equities ended the session with modest gains, recovering from modest losses throughout the day.
  • Oil was slightly higher, while gold fell 1.0% to $2631.98 per ounce.
  • Cash ACGBs are1-6bps cheaper with the belly underperforming. The AU-US 10-year yield differential is 1bp at +22bps.
  • Swap rates are flat to 2bps higher with the 3s10s curve flatter.
  • The bills strip is cheaper with pricing -2 to -5 across contracts.
  • RBA-dated OIS pricing is 1-5bps firmer across 2025 meetings. A cumulative 13bps of easing is priced by year-end.
  • Today, the local calendar will see CoreLogic Home Value, Judo Bank PMI Mfg and Building Approvals data.
  • Tomorrow, the AOFM plans to sell A$800mn of the 2.75% 21 June 2035 bond.
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ACGBs (YM -3.0 & XM flat) are cheaper after a bear-flattening by US tsys following Fed Chair Powell’s remarks at the NABE conference.

  • The remarks were taken hawkishly by markets with Powell stressing the Fed is not in a hurry to cut rates, emphasising that the overall US economy remains on solid footing.
  • The US 2-year rate was up 8bps to 3.64%, while the 10-year was 3bps cheaper at 3.78%. The curve flattened to 14.7 bps.
  • US equities ended the session with modest gains, recovering from modest losses throughout the day.
  • Oil was slightly higher, while gold fell 1.0% to $2631.98 per ounce.
  • Cash ACGBs are1-6bps cheaper with the belly underperforming. The AU-US 10-year yield differential is 1bp at +22bps.
  • Swap rates are flat to 2bps higher with the 3s10s curve flatter.
  • The bills strip is cheaper with pricing -2 to -5 across contracts.
  • RBA-dated OIS pricing is 1-5bps firmer across 2025 meetings. A cumulative 13bps of easing is priced by year-end.
  • Today, the local calendar will see CoreLogic Home Value, Judo Bank PMI Mfg and Building Approvals data.
  • Tomorrow, the AOFM plans to sell A$800mn of the 2.75% 21 June 2035 bond.