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AUSSIE BONDS: Slightly Mixed After A Mixed Domestic Data Drop

AUSSIE BONDS
BulletAPACFixed Income BulletsAustraliaMarkets

ACGBs (YM -1.0 & XM +2.0) are slightly mixed and off the Sydney session's best levels following today’s mixed domestic data drop.

  • October retail sales rose 0.6% m/m, stronger than expected, to be up 3.4% y/y, the highest growth rate since May 2023.
  • However, Q3 company profits were weak again falling 4.6% q/q after -6.8% q/q (revised down from -5.3%) to be down 8.5% y/y after -4.0%, driven by the mining sector. Also, the drop in inventory volumes was more than expected at -0.9% q/q, which shouldn’t be enough to change Q3 GDP estimates though, with Q2 revised up to +0.7%.
  • Cash US tsys are 3-4bps cheaper in today’s Asia-Pac session after Friday’s solid gains.
  • Cash ACGBs are 1bp cheaper to 2bps richer after being 4-5bps richer earlier. The AU-US 10-year yield differential is at +11bps.
  • Swap rates are 2bps higher to 2bps lower, with the 3s10s curve flatter.
  • The bills strip is flat to -3, with a steepening bias.
  • RBA-dated OIS pricing is flat to 2bps firmer across the 2025 meeting. A 25bps rate cut is not fully priced until May.
  • Tomorrow, the local calendar will see Current Account, Net Exports and Government Spending data for Q3.  Q3 GDP on Wednesday.
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ACGBs (YM -1.0 & XM +2.0) are slightly mixed and off the Sydney session's best levels following today’s mixed domestic data drop.

  • October retail sales rose 0.6% m/m, stronger than expected, to be up 3.4% y/y, the highest growth rate since May 2023.
  • However, Q3 company profits were weak again falling 4.6% q/q after -6.8% q/q (revised down from -5.3%) to be down 8.5% y/y after -4.0%, driven by the mining sector. Also, the drop in inventory volumes was more than expected at -0.9% q/q, which shouldn’t be enough to change Q3 GDP estimates though, with Q2 revised up to +0.7%.
  • Cash US tsys are 3-4bps cheaper in today’s Asia-Pac session after Friday’s solid gains.
  • Cash ACGBs are 1bp cheaper to 2bps richer after being 4-5bps richer earlier. The AU-US 10-year yield differential is at +11bps.
  • Swap rates are 2bps higher to 2bps lower, with the 3s10s curve flatter.
  • The bills strip is flat to -3, with a steepening bias.
  • RBA-dated OIS pricing is flat to 2bps firmer across the 2025 meeting. A 25bps rate cut is not fully priced until May.
  • Tomorrow, the local calendar will see Current Account, Net Exports and Government Spending data for Q3.  Q3 GDP on Wednesday.