November 25, 2024 04:00 GMT
AUSSIE BONDS: Richer, This Week’s Focus Is On CPI & RBA Gov. Bullock Speech
AUSSIE BONDS
ACGBs (YM +4.0 & XM +6.0) are richer but sitting mid-range on a data-light Sydney session.
- The local calendar is empty until October’s CPI on Wednesday and RBA Governor Bullock’s speech at 1955 AEDT on Thursday at the CEDA Conference.
- October headline CPI is projected to pick up to 2.3% y/y from 2.1%. It is the first month of the quarter and so there won’t be updates for most services.
- Cash US tsys are 4-6bps richer in today’s Asia-Pac session after Trump announced Bessent as Treasury Secretary. Bessent is seen as a Fiscal Hawk, with consensus thinking he will be positive overall for the economy and markets.
- Cash ACGBs are 5-7bps richer with the AU-US 10-year yield differential at 13bps.
- Swap rates are 3-5bps lower with the 3s10s curve flatter and EFPs wider.
- The bills strip has twist-flattened with pricing -1 to +3.
- RBA-dated OIS pricing is 1-4bps softer across 2025 meetings, with no easing priced by year-end. A 25bps rate cut is not fully priced until July.
- This week, the AOFM plans to sell A$800mn of the 3.50% 21 December 2034 bond on Wednesday and A$700mn of the 1.50% 21 June 2031 bond on Friday.
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