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AUSSIE BONDS: Richer, RBA Minutes Fail To Move Market

AUSSIE BONDS
BulletAPACFixed Income BulletsAustraliaMarkets

ACGBs (YM +3.0 & XM +3.5) are stronger after dealing in narrow ranges.

  • The RBA Minutes for the November meeting failed to be a market mover.
  • The minutes noted that “more than one good quarterly inflation outcome” would be needed for it to be “confident” that inflation was sustainably returning to target if it turned out that the temporarily lower headline inflation resulted in a greater drop in inflation expectations and indexation.
  • Q4 CPI is released on January 29 and Q1 at the end of April, thus May 20 may be the earliest meeting for a rate cut, consistent with current market pricing. The RBA remains ready to “adjust” policy.
  • Cash US tsys are ~1bp richer across benchmarks in today’s Asia-Pac session. 
  • Cash ACGBs are 3-4bps richer with the AU-US 10-year yield differential +16bps.
  • Swap rates are 3-4bps lower.
  • The bills strip has bull-flattened, with pricing flat to +3.
  • RBA-dated OIS pricing is 1-3bps softer across 2025 meetings.
  • Tomorrow, the local calendar will see the Westpac Leading Index alongside the AOFM’s planned sale of A$800mn of the 4.25% 21 December 2035 bond. The AOFM also plans to sell A$700mn of the 2.75% 21 November 2028 bond on Friday. 
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ACGBs (YM +3.0 & XM +3.5) are stronger after dealing in narrow ranges.

  • The RBA Minutes for the November meeting failed to be a market mover.
  • The minutes noted that “more than one good quarterly inflation outcome” would be needed for it to be “confident” that inflation was sustainably returning to target if it turned out that the temporarily lower headline inflation resulted in a greater drop in inflation expectations and indexation.
  • Q4 CPI is released on January 29 and Q1 at the end of April, thus May 20 may be the earliest meeting for a rate cut, consistent with current market pricing. The RBA remains ready to “adjust” policy.
  • Cash US tsys are ~1bp richer across benchmarks in today’s Asia-Pac session. 
  • Cash ACGBs are 3-4bps richer with the AU-US 10-year yield differential +16bps.
  • Swap rates are 3-4bps lower.
  • The bills strip has bull-flattened, with pricing flat to +3.
  • RBA-dated OIS pricing is 1-3bps softer across 2025 meetings.
  • Tomorrow, the local calendar will see the Westpac Leading Index alongside the AOFM’s planned sale of A$800mn of the 4.25% 21 December 2035 bond. The AOFM also plans to sell A$700mn of the 2.75% 21 November 2028 bond on Friday.