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BONDS: ACGBs Cheaper As Curve Steepens, OIS Pricing Continues To Cool

BONDS
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  • ACGBs (YM -5.0 & XM -5) are cheaper today and trade at session's worst. There was limited data out in the region today, while Japan was also out for a public holiday. Focus was largely on China where they held further business briefing surrounding measures to support the market, equities saw heightened volatility with markets swinging 1-3% both ways. Iron ore saw decent moves also and now trades 2.90% higher.
  • US cash tsys trading has been closed today with Japan out, we also saw limited trading in Tsys futures with ranges narrow.
  • Cash ACGBs are trading 4-6bps cheaper, with the curve beat-steepening. The 2yr is +3.2bps at 3.855%, while the 10yr is +4.1bps at 4.267% and now trades back at July 30 levels. The 2s10s made new highs earlier of 42.18, levels not seen since April 30th, we trade just off those levels at 40.10 now.
  • Earlier there was decent demand for the 2051 at the auction, although bid/cover was slightly down on the July auction at 3.15x, with average yield of 4.8254%, we trade little changed at 4.8253% now.
  • Swaps are trading 2-4bps higher
  • The bills strip -1 to -4 across contracts
  • RBA-dated OIS pricing has continued to cool with just 8.8bps of cuts priced in through to year-end now, down from 10bps this morning. There is 22bps of cuts priced for Feb, down 2bps. While pricing continues to cool further out the curve with 66bps, down 4bps priced through to Sept 2025.
  • The local calendar is light on until Thursday when we have employment data due
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  • ACGBs (YM -5.0 & XM -5) are cheaper today and trade at session's worst. There was limited data out in the region today, while Japan was also out for a public holiday. Focus was largely on China where they held further business briefing surrounding measures to support the market, equities saw heightened volatility with markets swinging 1-3% both ways. Iron ore saw decent moves also and now trades 2.90% higher.
  • US cash tsys trading has been closed today with Japan out, we also saw limited trading in Tsys futures with ranges narrow.
  • Cash ACGBs are trading 4-6bps cheaper, with the curve beat-steepening. The 2yr is +3.2bps at 3.855%, while the 10yr is +4.1bps at 4.267% and now trades back at July 30 levels. The 2s10s made new highs earlier of 42.18, levels not seen since April 30th, we trade just off those levels at 40.10 now.
  • Earlier there was decent demand for the 2051 at the auction, although bid/cover was slightly down on the July auction at 3.15x, with average yield of 4.8254%, we trade little changed at 4.8253% now.
  • Swaps are trading 2-4bps higher
  • The bills strip -1 to -4 across contracts
  • RBA-dated OIS pricing has continued to cool with just 8.8bps of cuts priced in through to year-end now, down from 10bps this morning. There is 22bps of cuts priced for Feb, down 2bps. While pricing continues to cool further out the curve with 66bps, down 4bps priced through to Sept 2025.
  • The local calendar is light on until Thursday when we have employment data due