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AUSSIE BONDS: Cheaper Despite Late Session By US Tsys Overnight

AUSSIE BONDS
RegionGlobalBulletAPACFixed Income BulletsAustraliaMarkets

ACGBs (YM -3.0 & XM -4.0) are weaker but off overnight lows after US tsys bounced into the close, erasing earlier losses on dip buying, risk-off trades, and month-end positioning. 

  • Focus now turns to today’s October employment report, with consensus at +105k jobs vs. +254k in September.
  • The FOMC announces their next rate decision next Thursday, November 7 (dots not included). Current projected rate cuts into early 2025 were largely steady vs. Wednesday (*): Nov'24 cumulative at -23.5bp ( -23.5bp), Dec'24 -42.8bp (-42.8bp), Jan'25 -58.1bp (-58.1bp), Mar'25 -75.0bp (-76.0bp).
  • Judo Bank Mfg PMI rises to 47.3 from 46.7 in Sept.
  • Australia’s home values rose 0.2% m/m (5.9% y/y) in October. Sydney fell 0.1% from the prior month — the first decline since January 2023 — said CoreLogic.  
  • Cash ACGBs are3-4bps cheaper with the AU-US 10-year yield differential at +26bps.
  • Swap rates are 2-3bps higher, with EFPs tighter.
  • The bills strip has bear-steepened, with pricing -1 to -4.
  • RBA-dated OIS pricing is flat to 3bps firmer for 2025 meetings. A cumulative 2bps of easing is priced by year-end.
  • Today, the local calendar will also see Household Spending, PPI and Home Loans Value data alongside AOFM’s planned sale of A$800mn of the 3.50% 21 December 2034 bond. 
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ACGBs (YM -3.0 & XM -4.0) are weaker but off overnight lows after US tsys bounced into the close, erasing earlier losses on dip buying, risk-off trades, and month-end positioning. 

  • Focus now turns to today’s October employment report, with consensus at +105k jobs vs. +254k in September.
  • The FOMC announces their next rate decision next Thursday, November 7 (dots not included). Current projected rate cuts into early 2025 were largely steady vs. Wednesday (*): Nov'24 cumulative at -23.5bp ( -23.5bp), Dec'24 -42.8bp (-42.8bp), Jan'25 -58.1bp (-58.1bp), Mar'25 -75.0bp (-76.0bp).
  • Judo Bank Mfg PMI rises to 47.3 from 46.7 in Sept.
  • Australia’s home values rose 0.2% m/m (5.9% y/y) in October. Sydney fell 0.1% from the prior month — the first decline since January 2023 — said CoreLogic.  
  • Cash ACGBs are3-4bps cheaper with the AU-US 10-year yield differential at +26bps.
  • Swap rates are 2-3bps higher, with EFPs tighter.
  • The bills strip has bear-steepened, with pricing -1 to -4.
  • RBA-dated OIS pricing is flat to 3bps firmer for 2025 meetings. A cumulative 2bps of easing is priced by year-end.
  • Today, the local calendar will also see Household Spending, PPI and Home Loans Value data alongside AOFM’s planned sale of A$800mn of the 3.50% 21 December 2034 bond.