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AUSSIE BONDS: Richer, AU-US 10Y Diff. Tighter, Q3 GDP Tomorrow

AUSSIE BONDS
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ACGBs (YM +2.0 & XM +2.5) are richer but off Sydney session bests.

  • The net export contribution to growth in Q3 was 0.1pp, less than expected, but the strongest public demand contribution since Q1 2022 means that GDP forecasts are likely to be little changed or maybe skewed to the upside.
  • Real public demand grew 2.4% q/q after 0.9% in Q2. It is expected to contribute 0.7pp to GDP tomorrow. The increase was driven by state & local government expenditure and public GFCF.  
  • Cash US tsys are slightly cheaper in today’s Asia-Pac session. Focus now turns to Wednesday's ADP private employment and ISM data ahead of Friday's non-farm payroll release.
  • Cash ACGBs are 2-3bps richer with the AU-US 10-year yield differential at +10bps.
  • Swap rates are 2bps lower.
  • The bills strip has bull-flattened, with pricing flat to +3.
  • RBA-dated OIS pricing is flat 4bps softer for 2025 meetings. A 25bps rate cut is not fully priced until May.
  • Tomorrow, the local calendar will see S&P Global PMI Composite & Services and Q3 GDP data alongside AOFM’s planned sale of A$700mn of the 3.25% 21 April 2029 bond.  The AOFM also plans to sell A$800mn of the 3.75% 21 April 2037 bond on Friday.     
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ACGBs (YM +2.0 & XM +2.5) are richer but off Sydney session bests.

  • The net export contribution to growth in Q3 was 0.1pp, less than expected, but the strongest public demand contribution since Q1 2022 means that GDP forecasts are likely to be little changed or maybe skewed to the upside.
  • Real public demand grew 2.4% q/q after 0.9% in Q2. It is expected to contribute 0.7pp to GDP tomorrow. The increase was driven by state & local government expenditure and public GFCF.  
  • Cash US tsys are slightly cheaper in today’s Asia-Pac session. Focus now turns to Wednesday's ADP private employment and ISM data ahead of Friday's non-farm payroll release.
  • Cash ACGBs are 2-3bps richer with the AU-US 10-year yield differential at +10bps.
  • Swap rates are 2bps lower.
  • The bills strip has bull-flattened, with pricing flat to +3.
  • RBA-dated OIS pricing is flat 4bps softer for 2025 meetings. A 25bps rate cut is not fully priced until May.
  • Tomorrow, the local calendar will see S&P Global PMI Composite & Services and Q3 GDP data alongside AOFM’s planned sale of A$700mn of the 3.25% 21 April 2029 bond.  The AOFM also plans to sell A$800mn of the 3.75% 21 April 2037 bond on Friday.