AUSSIE BONDS: Little Changed, Gov. Bullock Fronted Senate Committee

ACGBs (YM flat & XM -1.5) are slightly mixed after dealing in narrow ranges in today’s Sydney session. 

• RBA Governor Bullock appeared before the Senate Economics Committee today and reiterated that inflation needs to return “sustainably” to target and that is its focus. She also noted that both survey and market measures of medium-term inflation expectations are around 2.5%, the mid-point of the band.
• The RBA is focusing on trimmed mean to gauge the underlying inflation trends which is expected to drive where headline is going once the subsidies expire.
• Australia’s trade surplus narrowed to A$4.609bn (estimate +A$5.274bn) in September from a revised +A$5.284bn in August.
• Cash US tsys are slightly mixed, with a flattening bias, in today’s Asia-Pac session after yesterday’s savage post-US election sell-off.
• Cash ACGB swings are bounded by +/- 1bp with a steepening bias. The AU-US 10-year yield differential is at +21bps.
• Swap rates are 2bps lower to 1bp higher, with the 3s10s steeper.
• The bills strip has slightly twist-flattened, with pricing -2 to +1.
• RBA-dated OIS pricing is little changed today. 2025 meeting pricing remains 2-7bps higher than pre-RBA levels on Tuesday. No easing is priced for this year, with June 2025 being the first meeting where a 25bp rate cut is fully anticipated.