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AUSSIE BONDS: Heavy & Near Session Lows Ahead Of US Payrolls

AUSSIE BONDS
RegionGlobalBulletAPACFixed Income BulletsAustraliaMarkets

ACGBs (YM -6.0 & XM -4.0) are cheaper and at/near Sydney session lows.

  • Today’s domestic data drop (PPI, household spending, house prices, home loans and Judo Bank Mfg PMI) failed to move the market.
  • Cash US tsys are flat to 2bps richer, with a flattening bias, in today’s Asia-Pac session. Yesterday, US tsys finished 1-3bps richer. Trading desks noted modest short covering from proprietary/trading accounts looking to square up positions ahead of the release of US Nonfarm Payrolls later today.
  • Nonfarm payroll growth is expected to slow materially to circa 100k in October after a booming 254k in September, with significant disruption from strikes and potential hurricane fallout.
  • Cash ACGBs are 4-5bps cheaper with the AU-US 10-year yield differential at +27bps.
  • Swap rates are flat to 1bp higher, with EFPs 4bps tighter.
  • The bills strip has bear-steepened, with pricing flat to -3.
  • RBA-dated OIS pricing is flat to 2bps firmer for 2025 meetings. A cumulative 2bps of easing is priced by year-end.
  • On Monday, the local calendar will see Melbourne Institute Inflation and ANZ-Indeed Job Advertisements data alongside the AOFM’s planned sale of A$700mn of the 2.75% 21 November 2027 bond.  The AOFM also plans to sell A$800mn of the 2.75% 21 June 2035 bond on Friday.     
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ACGBs (YM -6.0 & XM -4.0) are cheaper and at/near Sydney session lows.

  • Today’s domestic data drop (PPI, household spending, house prices, home loans and Judo Bank Mfg PMI) failed to move the market.
  • Cash US tsys are flat to 2bps richer, with a flattening bias, in today’s Asia-Pac session. Yesterday, US tsys finished 1-3bps richer. Trading desks noted modest short covering from proprietary/trading accounts looking to square up positions ahead of the release of US Nonfarm Payrolls later today.
  • Nonfarm payroll growth is expected to slow materially to circa 100k in October after a booming 254k in September, with significant disruption from strikes and potential hurricane fallout.
  • Cash ACGBs are 4-5bps cheaper with the AU-US 10-year yield differential at +27bps.
  • Swap rates are flat to 1bp higher, with EFPs 4bps tighter.
  • The bills strip has bear-steepened, with pricing flat to -3.
  • RBA-dated OIS pricing is flat to 2bps firmer for 2025 meetings. A cumulative 2bps of easing is priced by year-end.
  • On Monday, the local calendar will see Melbourne Institute Inflation and ANZ-Indeed Job Advertisements data alongside the AOFM’s planned sale of A$700mn of the 2.75% 21 November 2027 bond.  The AOFM also plans to sell A$800mn of the 2.75% 21 June 2035 bond on Friday.