Bull Flattening, RBA Minutes Eyed

The bullish impetus from the U.S. Tsy space transpired into a bull flattening move in Aussie bond futures during the overnight session, even with the U.S. Tsy curve bull steepening after the long end retraced from firmest levels of the session. That leaves YM +7.5 & XM +10.0 in early Sydney trade, a little shy of their respective post-Sydney peaks and in line with late overnight levels. Bills run 3-9bp richer through the reds.

• Tuesday’s domestic calendar is headlined by the release of the minutes from the RBA’s August decision. Any wording surrounding the thought process re: the Bank’s assumptions when it comes to the path of the cash rate, which was roughly in line with the median analyst call if you looked at the ‘Big 4’ projections at the time of the decision (“assumed to increase to around 3 per cent by the end of 2022, and then decline a little by the end of 2024”) will be eyed after the Bank noted that policy was not on in a pre-set path in its post-meeting statement (a phrase that had been used in recent RBA speeches, but gave a dovish feel to the statement given its formal introduction). The Bank also chose to highlight the narrow path it is on when it comes to comes to returning inflation to the target range “over time, while keeping the economy on an even keel” (once again, not a new idea, but a new line in the statement).