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AUSSIE BONDS: Richer & At Best Levels, AU-US 10Y Diff. Pushes Wider

AUSSIE BONDS
RegionGlobalBulletAPACFixed Income BulletsAustraliaMarkets

In roll-impacted dealings, ACGBs (YM +4.4 & XM +5.4) are richer and sit at Sydney session highs. 

  • Outside of the previously outlined speech by Sarah Hunter, RBA's chief economist and Assistant Governor, there hasn't been much by way of domestic drivers to flag.
  • Cash US tsys are 2-3bps richer in today’s Asia-Pac session after yesterday’s bull-steepener. The US presidential debate saw betting odds nudge in favour of Harris. The US market will now focus on tomorrow’s CPI and Thursday’s PPI inflation measures. Core non-housing service inflation is expected to see at least a repeat of the 0.21% M/M from July.
  • Cash ACGBs are 5-6bps richer, with the AU-US 10-year yield differential at +24bps. At +24bps, the differential is approaching the upper bound of the +/-30bps range observed since November 2022.
  • Swap rates are 5-6bps lower.
  • The bills strip has twist-flattened, with pricing -2 to +8.
  • RBA-dated OIS pricing is flat to 9bps softer, with late 2025 meetings leading. The market is pricing 17bps of easing by year-end, with an additional 42bps by March 2025.
  • Tomorrow, the local calendar will see Consumer Inflation Expectation data. 
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In roll-impacted dealings, ACGBs (YM +4.4 & XM +5.4) are richer and sit at Sydney session highs. 

  • Outside of the previously outlined speech by Sarah Hunter, RBA's chief economist and Assistant Governor, there hasn't been much by way of domestic drivers to flag.
  • Cash US tsys are 2-3bps richer in today’s Asia-Pac session after yesterday’s bull-steepener. The US presidential debate saw betting odds nudge in favour of Harris. The US market will now focus on tomorrow’s CPI and Thursday’s PPI inflation measures. Core non-housing service inflation is expected to see at least a repeat of the 0.21% M/M from July.
  • Cash ACGBs are 5-6bps richer, with the AU-US 10-year yield differential at +24bps. At +24bps, the differential is approaching the upper bound of the +/-30bps range observed since November 2022.
  • Swap rates are 5-6bps lower.
  • The bills strip has twist-flattened, with pricing -2 to +8.
  • RBA-dated OIS pricing is flat to 9bps softer, with late 2025 meetings leading. The market is pricing 17bps of easing by year-end, with an additional 42bps by March 2025.
  • Tomorrow, the local calendar will see Consumer Inflation Expectation data.