Building On Earlier Cheapening Bias

Aussie bonds sit a little off recently registered session lows, with a move lower in front-end U.S. Tsys adding to the bearish impetus that was derived from Tuesday’s U.S. CPI print.

• Cash ACGBs run 7.5-18.5bp cheaper across the curve, bear flattening.
• YMZ2 is -18.2, showing through its overnight base, while XMZ2 is -12.9, approaching its own overnight trough at writing. The 3-/10-Year EFP box is flatter, with 3-Year EFP little changed and 10-Year EFP narrower, while Bills run 18 to 22 ticks cheaper through the reds.
• STIR markets now price in ~40bp of tightening for the RBA’s Oct policy meeting, amidst spillover from the repricing observed in market expectations re: FOMC tightening.