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AUSSIE BONDS: US PCE Data Drives Rally Ahead Of Month End

AUSSIE BONDS
RegionGlobalBulletAPACFixed Income BulletsAustraliaMarkets

ACGBs (YM +3.0 & XM +2.0) are stronger after US tsys rallied into the weekend and ahead of month-end, leaving yields near their lowest levels of the year. 

  • It also means a fifth straight month of gains for US tsys with Bloomberg reporting that it is the best run since 2010.
  • A benign inflation, consumption, and PCE inflation report underpinned expectations for more rate cuts ahead, including the potential for another -50 bps in November.
  • The US calendar will see MNI Chicago PMI today, ISMs tomorrow, ADP private employment data on Wednesday, and the September jobs report on Friday.
  • Elsewhere, weaker CPI figures for France and Spain, following weak euro area PMI data earlier in the week, drove the market to price in higher odds of the ECB cutting rates at its next meeting.
  • Cash ACGBs are2-4bps richer, with the AU-US 10-year yield differential at +18bps.
  • Swap rates are 2-3bps lower, with the 3s10s curve steeper.
  • The bills strip is richer, with pricing +1 to +2 across contracts.
  • RBA-dated OIS pricing is 1-4bps softer across meetings. A cumulative 15bps of easing is priced by year-end.
  • Today, the local calendar will see Private Sector Credit data for August. 
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ACGBs (YM +3.0 & XM +2.0) are stronger after US tsys rallied into the weekend and ahead of month-end, leaving yields near their lowest levels of the year. 

  • It also means a fifth straight month of gains for US tsys with Bloomberg reporting that it is the best run since 2010.
  • A benign inflation, consumption, and PCE inflation report underpinned expectations for more rate cuts ahead, including the potential for another -50 bps in November.
  • The US calendar will see MNI Chicago PMI today, ISMs tomorrow, ADP private employment data on Wednesday, and the September jobs report on Friday.
  • Elsewhere, weaker CPI figures for France and Spain, following weak euro area PMI data earlier in the week, drove the market to price in higher odds of the ECB cutting rates at its next meeting.
  • Cash ACGBs are2-4bps richer, with the AU-US 10-year yield differential at +18bps.
  • Swap rates are 2-3bps lower, with the 3s10s curve steeper.
  • The bills strip is richer, with pricing +1 to +2 across contracts.
  • RBA-dated OIS pricing is 1-4bps softer across meetings. A cumulative 15bps of easing is priced by year-end.
  • Today, the local calendar will see Private Sector Credit data for August.