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AUSSIE BONDS: Very Heavy Ahead Of US CPI Today & Jobs Tomorrow

AUSSIE BONDS
RegionGlobalBulletAPACFixed Income BulletsAustraliaMarkets

ACGBs (YM -10.0 & XM -11.00) are sharply cheaper and at the Sydney session’s worst levels ahead of key US CPI data later today and October jobs tomorrow. 3-year yield climbs 10bps to 4.21%, the highest since 2023.

  • Q3 WPI printed below expectations at 0.8% q/q and 3.5% y/y after 0.8% q/q and 4.1% y/y, lowest since Q4 2022.
  • Cash US tsys are slightly cheaper in today’s Asia-Pac session after yesterday’s heavy session.  
  • Cash ACGBs are 10-11bps cheaper with the AU-US 10-year yield differential at +24bps.
  • Swap rates are 9bps higher.
  • The bills strip has sharply bear-steepened, with pricing -2 to -12.
  • RBA-dated OIS pricing is 2-9bps firmer across the 2025 meeting. A 25bps rate cut is not fully priced until September.
  • Analysts are again forecasting a 25k rise in employment tomorrow but with the unemployment rate steady at 4.1%. The labour market remains tight. The RBA noted in November that “some indicators have recently stabilised”, including hours worked, while the youth unemployment rate and underemployment have “declined”.
  • QTC has priced an A$1.75bn increase of the 4.50% Aug-35 A$ bond. The transaction has a re-offer yield of 5.47%.
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ACGBs (YM -10.0 & XM -11.00) are sharply cheaper and at the Sydney session’s worst levels ahead of key US CPI data later today and October jobs tomorrow. 3-year yield climbs 10bps to 4.21%, the highest since 2023.

  • Q3 WPI printed below expectations at 0.8% q/q and 3.5% y/y after 0.8% q/q and 4.1% y/y, lowest since Q4 2022.
  • Cash US tsys are slightly cheaper in today’s Asia-Pac session after yesterday’s heavy session.  
  • Cash ACGBs are 10-11bps cheaper with the AU-US 10-year yield differential at +24bps.
  • Swap rates are 9bps higher.
  • The bills strip has sharply bear-steepened, with pricing -2 to -12.
  • RBA-dated OIS pricing is 2-9bps firmer across the 2025 meeting. A 25bps rate cut is not fully priced until September.
  • Analysts are again forecasting a 25k rise in employment tomorrow but with the unemployment rate steady at 4.1%. The labour market remains tight. The RBA noted in November that “some indicators have recently stabilised”, including hours worked, while the youth unemployment rate and underemployment have “declined”.
  • QTC has priced an A$1.75bn increase of the 4.50% Aug-35 A$ bond. The transaction has a re-offer yield of 5.47%.