Free Trial

Cheaper After RBA Forecast Update, Eyeing US Tsys Ahead Of Payrolls

AUSSIE BONDS

ACGBs (YM -8.0 & XM -8.0) are 1-3bp cheaper after the RBA released updated forecasts in the latest Statement on Monetary Policy (SoMP). The forecasts show inflation returning to within its 2-3% target band at the end of 2025. In May, the RBA predicted inflation will hit 3% by mid-2025 but that has now edged up to 3.1%.

  • Cash ACGBs are 7-8bp cheaper on the day with the AU-US 10-year yield differential +5bp at +1bp.
  • Swap rates are 4-5bp higher on the day with EFPs tighter.
  • The bills strip has bear flattened with pricing flat to -7.
  • RBA-dated OIS pricing is 1-3bp firmer across meetings after the SoMP release.
  • (AFR) China has agreed to lift tariffs on imports of Australian barley from Saturday in a key concession to more than $20 billion worth of sanctions on exports imposed at the height of political tensions between Canberra and Beijing.
  • On Monday the local calendar sees ANZ-Indeed Job Ads. It is worth noting that NSW has a bank holiday on Monday.
  • Later today sees the release of US Non-Farm Payrolls, with +200k consensus versus +209k prior. (See MNI NFP Preview here)
  • The AOFM announced plans to sell A$700mn of the 2.75% 21 June 2035 bond on Wednesday, 9 August 2023.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.