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AUSSIE BONDS: Richer, This Week’s Focus Is On CPI & RBA Gov. Bullock Speech

AUSSIE BONDS
BulletAPACFixed Income BulletsAustraliaMarkets

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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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.