Awaiting AUS Employment Data

Aussie rates futures have given up much of yesterday afternoon’s gains, re-testing the week’s lows with YM -6.0 and XM -8.0. The 3/10 cash curve bear steepens by 2bp following the U.S. Tsy lead. Yields are 4-8bp higher across the curve with the 15-30-year zone leading the move.

• AU-US 10-year yield differential is 1bp lower at 1bp.
• Swap rates are higher 5-7bp with the 3s10s curve 2bp steeper.
• Bills are 3-6bp weaker with the reds leading the charge.
• March meeting RBA-dated OIS continues to hold steady with a 92% chance of a 25bp hike priced. Terminal rate expectations (Sep/Oct-22) however continue to fluctuate between 4.10%-4.22% with today’s open near the top of the range.
• The U.S. Tsy lead is likely to dominate morning trade, but January's domestic labour market report will likely take over the drving seat later this morning.
• So far today, CBA Household Spending Intentions data showed a 6.9% decline in January after rising 0.3% in December. While potentially alarming, it is important to note that the data is not seasonally adjusted.