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AUSSIE BONDS: Slightly Cheaper, Limited Reaction To Q3 CPI, Focus On US Data

AUSSIE BONDS
RegionGlobalBulletAPACFixed Income BulletsAustraliaMarkets

ACGBs (YM -1.0 & XM -1.5) are weaker and little changed after today’s Q3/September CPI release.

  • Q3 trimmed mean CPI printed in line with expectations at 0.8% q/q and 3.5% y/y after an upwardly revised Q2 at 0.9% and 4.0%. This is consistent with the RBA’s Q4 forecast but the tick-up in services inflation is likely to mean the Board remains cautious and stays on hold over the rest of 2024.
  • Problematically, services rose 1.1% q/q and 4.6% y/y up from Q2’s 1.0% and 4.5%, in line with Q4 2023, driven by rents, insurance and child care. Core services were also strong rising 1.3% q/q and 4.1% y/y after 1.0% and 4.1% y/y.
  • Cash US tsys are little changed in today’s Asia-Pac session. The focus is now on today's ADP employment data, GDP and Pending Home Sales.
  • Cash ACGBs are 1bp cheaper on the day. The AU-US 10-year yield differential is at +21bps.
  • Swap rates are 1bp lower on the day.
  • The bills strip is weaker, with pricing -1 to -3.
  • RBA-dated OIS pricing is 1-3bps firmer on the day. A cumulative 3bps of easing is priced by year-end.
  • Tomorrow, the local calendar will see Retail Sales, Terms of Trade, Building Approvals and Private Sector Credit data.
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ACGBs (YM -1.0 & XM -1.5) are weaker and little changed after today’s Q3/September CPI release.

  • Q3 trimmed mean CPI printed in line with expectations at 0.8% q/q and 3.5% y/y after an upwardly revised Q2 at 0.9% and 4.0%. This is consistent with the RBA’s Q4 forecast but the tick-up in services inflation is likely to mean the Board remains cautious and stays on hold over the rest of 2024.
  • Problematically, services rose 1.1% q/q and 4.6% y/y up from Q2’s 1.0% and 4.5%, in line with Q4 2023, driven by rents, insurance and child care. Core services were also strong rising 1.3% q/q and 4.1% y/y after 1.0% and 4.1% y/y.
  • Cash US tsys are little changed in today’s Asia-Pac session. The focus is now on today's ADP employment data, GDP and Pending Home Sales.
  • Cash ACGBs are 1bp cheaper on the day. The AU-US 10-year yield differential is at +21bps.
  • Swap rates are 1bp lower on the day.
  • The bills strip is weaker, with pricing -1 to -3.
  • RBA-dated OIS pricing is 1-3bps firmer on the day. A cumulative 3bps of easing is priced by year-end.
  • Tomorrow, the local calendar will see Retail Sales, Terms of Trade, Building Approvals and Private Sector Credit data.