Cheaper As Jackson Hole Vigil Comes To An End

ACGBs (YM -6.0 & XM -5.0) are cheaper after dealing in narrow ranges in today’s Sydney session. With the domestic calendar light today, local participants appear to have been happy to sit on the sidelines ahead of Fed Chair Powell’s address at the Jackson Hole Symposium later today.

• The latest round of ACGB Nov-28 supply showed strong demand metrics, extending the trend of firm pricing at ACGB auctions.
• Cash US tsys are flat to 1bp richer, with a slight steepening bias, in today’s Asia-Pac session after yesterday’s sell-off.
• Cash ACGBs are 4-5bps cheaper, with the AU-US 10-year yield differential at +8bps.
• Swap rates are 4bps higher.
• The bills strip has bear-steepened, with pricing flat to -6.
• RBA-dated OIS pricing is flat to 6bps firmer. A cumulative 21bps of easing is priced by year-end.
• Next week, the local calendar is light until Q2 Construction Work Done and July CPI Monthly data on Wednesday.
• Next week, the AOFM plans to sell A$800mn of the 3.50% 21 December 2034 bond on Wednesday and A$700mn of the 2.75% 21 November 2029 bond on Friday. There is also a planned sale of A$100mn of the 0.25% 21 November 2032 index-linked bond on Tuesday.