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AUSSIE BONDS: Cheaper But Near Session Bests Ahead Of US PPI Data

AUSSIE BONDS
BulletAPACFixed Income BulletsAustraliaMarkets

ACGBs (YM -2.0 & XM -2.5) are weaker but well off Sydney session cheaps.

  • Outside of the previously outlined MI inflation expectations, there hasn't been much by way of domestic drivers to flag.
  • Cash US tsys are 1-2bps richer in today’s Asia-Pac session after yesterday’s aggressive post-CPI sell-off. Fed chair Powell cautioned against getting "excited" about yesterday's CPI report ahead of PPI (today 0830 ET), reminding that the latter report carries potentially different implications for the Fed's preferred PCE gauge.
  • Cash ACGBs are 2bps cheaper with the AU-US 10-year yield differential at -13bps.
  • Swap rates are 2-3bps higher.
  • The bills strip has bear-steepened, with pricing -1 to -3.
  • RBA-dated OIS pricing is flat to 4bps firmer across 2025 meetings today, led by late-2025 contracts. A 25bp rate cut in April remains fully priced (115%), while the probability of a February cut stands at 82%, based on an effective cash rate of 4.34%.
  • The local calendar is empty until the RBA Policy Decision next Tuesday.
  • Tomorrow, the AOFM plans to sell A$700mn of the 1.50% 21 June 2031 bond.
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ACGBs (YM -2.0 & XM -2.5) are weaker but well off Sydney session cheaps.

  • Outside of the previously outlined MI inflation expectations, there hasn't been much by way of domestic drivers to flag.
  • Cash US tsys are 1-2bps richer in today’s Asia-Pac session after yesterday’s aggressive post-CPI sell-off. Fed chair Powell cautioned against getting "excited" about yesterday's CPI report ahead of PPI (today 0830 ET), reminding that the latter report carries potentially different implications for the Fed's preferred PCE gauge.
  • Cash ACGBs are 2bps cheaper with the AU-US 10-year yield differential at -13bps.
  • Swap rates are 2-3bps higher.
  • The bills strip has bear-steepened, with pricing -1 to -3.
  • RBA-dated OIS pricing is flat to 4bps firmer across 2025 meetings today, led by late-2025 contracts. A 25bp rate cut in April remains fully priced (115%), while the probability of a February cut stands at 82%, based on an effective cash rate of 4.34%.
  • The local calendar is empty until the RBA Policy Decision next Tuesday.
  • Tomorrow, the AOFM plans to sell A$700mn of the 1.50% 21 June 2031 bond.