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AUSSIE BONDS: Slightly Richer, US Tsys Stronger As Odds Of 50bp Cut Rise

AUSSIE BONDS
RegionGlobalBulletAPACFixed Income BulletsAustraliaMarkets

ACGBs (YM +0.8 & XM +1.5) are slightly richer after US tsys finished with yields 2-5bps lower. The 2yr finished -3bps at 3.55%, while the 10yr closed -3bps at 3.62%, the 2s10s made a new high of 9.809, before closing the session -0.220 at 6.465.

  • Projected rate hikes through year-end look largely steady vs. Monday levels: Sep'24 cumulative -41.0bp (-40.6bp), Nov'24 cumulative -78.2bp (-79.1bp), Dec'24 -119.8bp (-120.0bp).
  • Lower rates supported US equities but have worked against the USD, which was broadly weaker. Bank of America technical strategist Stephen Suttmeier said the S&P 500 is set for a key test though he says the outlook is still positive. “A decisive break above the August and July highs at 5650-5670 would confirm the cup and handle and favour more upside to 5930 (measured move) and 6180 (pattern count).”
  • Today the US calendar will see Retail Sales, Industrial Production and a 20y bond auction.
  • Cash ACGBs areflat to 1bp richer, with the AU-US 10-year yield differential at +19bps.
  • Swap rates are 1bp lower.
  • The bill strip has changed only a little, with pricing +/- 1bp across contracts.
  • RBA-dated OIS pricing is slightly softer. A cumulative 20bps of easing is priced by year-end.
  • There are no data or events in Australia today.
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ACGBs (YM +0.8 & XM +1.5) are slightly richer after US tsys finished with yields 2-5bps lower. The 2yr finished -3bps at 3.55%, while the 10yr closed -3bps at 3.62%, the 2s10s made a new high of 9.809, before closing the session -0.220 at 6.465.

  • Projected rate hikes through year-end look largely steady vs. Monday levels: Sep'24 cumulative -41.0bp (-40.6bp), Nov'24 cumulative -78.2bp (-79.1bp), Dec'24 -119.8bp (-120.0bp).
  • Lower rates supported US equities but have worked against the USD, which was broadly weaker. Bank of America technical strategist Stephen Suttmeier said the S&P 500 is set for a key test though he says the outlook is still positive. “A decisive break above the August and July highs at 5650-5670 would confirm the cup and handle and favour more upside to 5930 (measured move) and 6180 (pattern count).”
  • Today the US calendar will see Retail Sales, Industrial Production and a 20y bond auction.
  • Cash ACGBs areflat to 1bp richer, with the AU-US 10-year yield differential at +19bps.
  • Swap rates are 1bp lower.
  • The bill strip has changed only a little, with pricing +/- 1bp across contracts.
  • RBA-dated OIS pricing is slightly softer. A cumulative 20bps of easing is priced by year-end.
  • There are no data or events in Australia today.