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AUSSIE BONDS: Slightly Richer Ahead Of RBA Policy Decision

AUSSIE BONDS

ACGBs (YM +2.0 & XM +1.5) are slightly stronger ahead of today’s RBA Policy Decision. Bloomberg consensus is unanimously expecting a no-change outcome. 

  • Following the decision and statement at 1430 AEST, RBA Governor Bullock will hold a press conference at 1530 AEST. She last spoke on September 5 and since then survey data have been soft but labour market and lending data strong. So, we don’t expect that the Board has changed its view that it is too soon to discuss rate cuts.
  • Cash US tsys are 1-2bps richer, with a steepening bias, in today’s Asia-Pac session after yesterday’s modest cheapening.  There was a small richening in tsys as the PBoC announced it would cut outstanding mortgage rates. China's 10-year yields fell to 2% for the first time in history.
  • Cash ACGBs are 2-3bps richer with the AU-US 10-year yield differential at +20bps.
  • Swap rates are 2-4bps lower, with the 3s10s curve steeper.
  • The bills strip has bull-flattened, with pricing flat to +4.
  • RBA-dated OIS pricing is 1-4bps softer for 2025 meetings. A cumulative 15bps of easing is priced by year-end.
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ACGBs (YM +2.0 & XM +1.5) are slightly stronger ahead of today’s RBA Policy Decision. Bloomberg consensus is unanimously expecting a no-change outcome. 

  • Following the decision and statement at 1430 AEST, RBA Governor Bullock will hold a press conference at 1530 AEST. She last spoke on September 5 and since then survey data have been soft but labour market and lending data strong. So, we don’t expect that the Board has changed its view that it is too soon to discuss rate cuts.
  • Cash US tsys are 1-2bps richer, with a steepening bias, in today’s Asia-Pac session after yesterday’s modest cheapening.  There was a small richening in tsys as the PBoC announced it would cut outstanding mortgage rates. China's 10-year yields fell to 2% for the first time in history.
  • Cash ACGBs are 2-3bps richer with the AU-US 10-year yield differential at +20bps.
  • Swap rates are 2-4bps lower, with the 3s10s curve steeper.
  • The bills strip has bull-flattened, with pricing flat to +4.
  • RBA-dated OIS pricing is 1-4bps softer for 2025 meetings. A cumulative 15bps of easing is priced by year-end.