Cheaper, But Off Lows

ACGBs are off cheapest levels of the day, tracking a similar move in U.S. Tsy futures, with major Aussie bond future contracts operating a little above two-week lows made earlier. There was little by way of major macro headline drivers during the session, with focus centred around recent, hawkish Fedspeak, and a region-wide bid in major Asia-Pac equity indices.

• Cash ACGBs run 2.5-6.0bp cheaper across the curve, bear steepening. YM is -3.5, a shade below its overnight trough, while XM is -4.5, comfortably below its own overnight lows. Bills run 2 ticks richer to 7 ticks cheaper through the reds.
• Melbourne Institute consumer inflation expectations for August moderated to 5.9% from 6.3% in July. While the result sees inflation expectations continuing a pullback from the 6.7% print witnessed in June (highest since Jun ‘08), a reminder that the RBA has emphasised that it is cognisant of the psychology surrounding inflation, having already signalled the need for further monetary tightening at coming meetings amidst expected labour market strength and forecasts for CPI to hit 7.75% by end-’22.
• Friday will see A$700mn of ACGB Sep-2026 supply, followed by the release of the AOFM’s weekly issuance slate