Biased Cheaper To Start

The broader cheapening in core global FI markets keeps Aussie bonds on the defensive after ACGBs cheapened as global peers richenened during Thursday’s Sydney session.

• YM has had a look through its overnight low at the re-open, while XM hovers just above its post-Sydney session peak, leaving the former -5.0 & the latter -4.0, with a fairly parallel 4-5bp of cheapening witnessed across the wider ACGB curve.
• Bills print 3-7bp cheaper through the reds, with bear steepening in play on the strip.
• RBA dated OIS shows 1-2bp higher vs. late Thursday levels across most of the observable meetings, with just under 20bp of tightening priced in for the Feb ’23 gathering and a terminal rate of just over 3.80% eyed.
• The local docket is empty into Christmas, with participants already eying the exits.