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AUSSIE BONDS: Cheaper, FOMC Vigil Continues

AUSSIE BONDS
RegionGlobalBulletAPACFixed Income BulletsAustraliaMarkets

ACGBs (YM -5.0 & XM -3.0) are weaker with current dealings in the middle of today’s Sydney session ranges. 

  • The Westpac leading Index fell 0.05% M/M in August.
  • Cash US tsys are flat to 1bp richer in today’s Asia-Pac session after yesterday’s modest sell-off. Yesterday’s session reflected position squaring ahead of today’s FOMC policy announcement. The markets still project closer to a 50bp cut than a 25bp move from the Fed.
  • Cash ACGBs are 3bps cheaper with the AU-US 10-year yield differential at +23bps.
  • Swap rates are 3bps higher.
  • The bills strip has bear-steepened, with pricing -2 to -6.
  • RBA-dated OIS pricing is 2-3bps firmer across 2025 meetings. A cumulative 20bps of easing is priced by year-end.
  • (Bloomberg) After more than two years of currency pain, Asia’s central banks are in for some relief as the Federal Reserve is set to cut interest rates by a quarter-point Wednesday. The path for the region’s own monetary policy, though, will be bumpy from here. (See link)
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ACGBs (YM -5.0 & XM -3.0) are weaker with current dealings in the middle of today’s Sydney session ranges. 

  • The Westpac leading Index fell 0.05% M/M in August.
  • Cash US tsys are flat to 1bp richer in today’s Asia-Pac session after yesterday’s modest sell-off. Yesterday’s session reflected position squaring ahead of today’s FOMC policy announcement. The markets still project closer to a 50bp cut than a 25bp move from the Fed.
  • Cash ACGBs are 3bps cheaper with the AU-US 10-year yield differential at +23bps.
  • Swap rates are 3bps higher.
  • The bills strip has bear-steepened, with pricing -2 to -6.
  • RBA-dated OIS pricing is 2-3bps firmer across 2025 meetings. A cumulative 20bps of easing is priced by year-end.
  • (Bloomberg) After more than two years of currency pain, Asia’s central banks are in for some relief as the Federal Reserve is set to cut interest rates by a quarter-point Wednesday. The path for the region’s own monetary policy, though, will be bumpy from here. (See link)