AUSSIE BONDS: Little Changed, Shaping Up As A Typical Pre-Payrolls Friday

ACGBs (YM -1.0 & XM Flat) are little changed as the global markets await US payrolls data later today. US 2- and 10-year yields fell 1bp and 3bps respectively. 

• ADP reported private US employers added 99k jobs in August. This is the lowest number in more than three years and further signifies a cooling labour market.
• The ISM services index was little changed and in line with consensus at 51.5.
• September Fed rate cut pricing again neared 50/50 for 50bp in Fed Funds futures, before fading to 40/60.
• Today’s US calendar will be dominated by payrolls (our preview is here).
• Iron ore extended its slump towards the $US90 a tonne level and gold rose above the $US2500.
• Brent crude prices stabilised near US$73 per barrel, after recent sharp declines, following a deal that Opec+ members will postpone planned increases to oil production for at least two months.
• Cash ACGBs are unchanged, with the AU-US 10-year yield differential at +20bps.
• Swap rates are flat to 1bp higher.
• The bills strip is flat to -2 across contracts.
• RBA-dated OIS pricing is 1-2bps firmer. A cumulative 17bps of easing is priced by year-end.
• Today, the local calendar will see Home Loans and Foreign Reserves data.