Bear Steepening Kicks In, Bonds Continue To Trade Heavily

Aussie bond futures continue to oscillate within the lower end of their respective overnight session ranges, with the latest batch of domestic data providing nothing in the way of tangible impulse for the space.

• YM deals -5.5, with XM -9.5. Wider cash ACGB trade has seen bear steepening pressure come into play, with the major benchmarks running 5.0-11.5bp cheaper, as super-long paper leads the way lower.
• Bills are flat to -7 through the reds, with RBA terminal rate pricing nudging up to 3.95%, per dated OIS.
• A reminder that the latest monthly Westpac consumer confidence reading fell 0.9 M/M, although that came after a sharp post-RBA meting bounce, as the Bank ‘only’ delivered a 25bp hike. Westpac don’t expect the RBA “relief rebound” to extend (see our earlier bullet for more details on that matter).
• Elsewhere, the latest monthly NAB business survey saw the conditions print move higher, while the confidence reading moderated to 5 from the prior 10. The survey collator noted that “labour and purchase costs growth continued to show the early signs of an easing from their recent peaks but remain elevated. Price growth also eased but still points to a very strong Q3 print for the underlying CPI. Overall, the survey indicates the economy has remained resilient.”