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AUSSIE BONDS: Cheaper, US Yields Higher Ahead Of US Payrolls Later Today

AUSSIE BONDS
RegionGlobalBulletAPACFixed Income BulletsAustraliaMarkets

ACGBs (YM -5.0 & XM -6.0) are cheaper with US tsys ahead of today’s US non-farm payrolls data. The 2yr yield closed +6.3bps at 3.706%, while the 10yr closed +6.4bps at 3.847%. 

  • US data was mixed on Thursday. ISM Services was stronger than expected with some strong readings for prices paid and new orders. However, the employment index fell back into contractionary territory, which took some of the gloss off an otherwise strong report.
  • Initial jobless claims rose 6k last week to 225k, slightly ahead of consensus albeit consistent with no meaningful further deterioration in the labour market.
  • All eyes will now turn to headline nonfarm payrolls where growth is seen accelerating marginally to 150k in September after 142k in August.(See MNI Employment Preview here)
  • Cash ACGBs are4-6bps cheaper with the AU-US 10-year yield differential at +22bps.
  • Swap rates are 3-5bps higher with the 3s10s curve steeper.
  • The bills strip has bear-steepened, with pricing -1 to -4.
  • RBA-dated OIS pricing is 1-5bps firmer for 2025 meetings. A cumulative 12bps of easing is priced by year-end.
  • Today, the local calendar will see Household Spending and Home Loans data alongside the AOFM’s planned sale of A$700mn of the 2.75% 21 November 2027 bond.
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ACGBs (YM -5.0 & XM -6.0) are cheaper with US tsys ahead of today’s US non-farm payrolls data. The 2yr yield closed +6.3bps at 3.706%, while the 10yr closed +6.4bps at 3.847%. 

  • US data was mixed on Thursday. ISM Services was stronger than expected with some strong readings for prices paid and new orders. However, the employment index fell back into contractionary territory, which took some of the gloss off an otherwise strong report.
  • Initial jobless claims rose 6k last week to 225k, slightly ahead of consensus albeit consistent with no meaningful further deterioration in the labour market.
  • All eyes will now turn to headline nonfarm payrolls where growth is seen accelerating marginally to 150k in September after 142k in August.(See MNI Employment Preview here)
  • Cash ACGBs are4-6bps cheaper with the AU-US 10-year yield differential at +22bps.
  • Swap rates are 3-5bps higher with the 3s10s curve steeper.
  • The bills strip has bear-steepened, with pricing -1 to -4.
  • RBA-dated OIS pricing is 1-5bps firmer for 2025 meetings. A cumulative 12bps of easing is priced by year-end.
  • Today, the local calendar will see Household Spending and Home Loans data alongside the AOFM’s planned sale of A$700mn of the 2.75% 21 November 2027 bond.