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AUSSIE BONDS: Cheaper With US Tsys, RBA Policy Decision Tomorrow

AUSSIE BONDS

ACGBs (YM -3.0 & XM -3.5) are cheaper after the cash tsys curve bear-steepened on Friday, with yields closing 1-3bps higher. 

  • Gov Waller expressed concern with inflation undershooting, not overshooting, noting firms' limited pricing power and wage inflation coming down, and that inflation is potentially on a lower path than had previously been expected.
  • Fed Governor Bowman (voter) has issued a statement explaining why she dissented against the FOMC’s 50bp cut decision.
  • Projected rate cuts into early 2025 bounced off early session lows, latest vs. late Thursday levels (*) as follows: Nov'24 cumulative -37.8bp (-35.9bp), Dec'24 -75.0bp (-72.4bp), Jan'25 -108.5bp (-106.5bp).
  • Judo Bank PMIs for September have printed: Mfg Index fell to 46.7 from 48.5 in Aug; Services Index fell to 50.6 from 52.5 in Aug; and Composite Index fell to 49.8 from 51.7 in Aug.
  • Cash ACGBs are3-4bps cheaper with the AU-US 10-year yield differential at +21bps.
  • Swap rates are 3bps higher.
  • The bills strip is cheaper, with pricing -2 to -4.
  • RBA-dated OIS pricing is 1-3bps firmer across 2025 meetings. A cumulative 16bps of easing is priced by year-end.
  • The RBA's Policy Decision is due tomorrow, with Bloomberg consensus is unanimous in expecting a no-change outcome. 
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ACGBs (YM -3.0 & XM -3.5) are cheaper after the cash tsys curve bear-steepened on Friday, with yields closing 1-3bps higher. 

  • Gov Waller expressed concern with inflation undershooting, not overshooting, noting firms' limited pricing power and wage inflation coming down, and that inflation is potentially on a lower path than had previously been expected.
  • Fed Governor Bowman (voter) has issued a statement explaining why she dissented against the FOMC’s 50bp cut decision.
  • Projected rate cuts into early 2025 bounced off early session lows, latest vs. late Thursday levels (*) as follows: Nov'24 cumulative -37.8bp (-35.9bp), Dec'24 -75.0bp (-72.4bp), Jan'25 -108.5bp (-106.5bp).
  • Judo Bank PMIs for September have printed: Mfg Index fell to 46.7 from 48.5 in Aug; Services Index fell to 50.6 from 52.5 in Aug; and Composite Index fell to 49.8 from 51.7 in Aug.
  • Cash ACGBs are3-4bps cheaper with the AU-US 10-year yield differential at +21bps.
  • Swap rates are 3bps higher.
  • The bills strip is cheaper, with pricing -2 to -4.
  • RBA-dated OIS pricing is 1-3bps firmer across 2025 meetings. A cumulative 16bps of easing is priced by year-end.
  • The RBA's Policy Decision is due tomorrow, with Bloomberg consensus is unanimous in expecting a no-change outcome.