October 24, 2024 22:46 GMT
AUSSIE BONDS: Richer With US Tsys, Light Local Calendar
AUSSIE BONDS
ACGBs (YM +1.0 & XM +2.5) are slightly stronger after US tsys managed a modest rebound from the highest yields in a month. US yields were flat to down 4bps, with the 10-year rate at 4.21%, after peaking at over 4.25% yesterday.
- Initially, US tsys took their cues from European flash PMI data. German composite PMI remained in contractionary territory for the fourth month while French flash October PMIs were weaker than expected for the second consecutive month.
- However, early support for US tsys evaporated after strong US data (initial jobless claims, new home sales and flash PMIs).
- Australia’s policymakers have achieved the dual-task of reining in inflation without significantly holding back domestic activity, setting the economy up for a soft landing, according to Treasurer Jim Chalmers. (per BBG)
- Cash ACGBs are2bps richer with the AU-US 10-year yield differential at +22bps.
- Swap rates are 2-3bps lower.
- The bills strip has bull-flattened, with pricing flat to +3.
- RBA-dated OIS pricing is 1-4bps softer for 2025 meetings. A cumulative 4bps of easing is priced by year-end.
- Today, the local calendar is empty apart from the AOFM’s planned sale of A$300mn of the 4.25% 21 June 2034 bond.
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