Cheaper But Near Session Bests, RBA Minutes On Tuesday

ACGBs (YM -7.0 & XM -5.0) are weaker but near Sydney session highs on a light-data day.

• Outside of the previously outlined RBA Governor Bullock’s testimony, there hasn't been much in the way of domestic drivers to flag.
• The latest round of ACGB May-28 supply saw the weighted average yield print 0.8bps through prevailing mids, extending the recent trend of firm pricing at ACGB auctions. However, the cover ratio fell to 3.8286x from 4.0778x at the July auction. A significantly lower outright yield likely impacted bidding.
• Cash US tsys are 1-3bps richer, with a steepening bias, in today’s Asia-Pac session after yesterday’s sharp sell-off following stronger-than-expected data.
• Cash ACGBs are 5-6bps cheaper after paring earlier losses (was 10-11bps cheaper).
• The AU-US 10-year yield differential is +3bps.
• Swap rates are 5-6bps higher, with EFPs slightly tighter.
• The bills strip has bear-steepened, with pricing -2 to -9.
• RBA-dated OIS pricing has moved 4-8bps firmer across meetings beyond November. A cumulative 19bps of easing is priced by year-end.
• Next week, the local calendar is empty on Monday, ahead of the RBA Minutes of August Policy Meeting on Tuesday.
• The AOFM plans to sell A$800mn of the 3.00% 21 November 2033 bond on Wednesday and A$700mn of the 2.75% 21 November 2028 bond on Friday.