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Cheaper But Off Worst Levels, CPI Data Tomorrow

AUSSIE BONDS

ACGBs (YM flat & XM -3.0) are sitting cheaper after dealing in narrow ranges so far in the Sydney session, ahead of January CPI data tomorrow. Without domestic data to drive the market, local participants have been content to seek directional guidance from US tsys during today’s Asia-Pac session. Cash US tsys are 1-2bps richer across benchmarks.

  • Cash ACGBs are 1-3bps cheaper with the AU-US 10-year yield differential 1bp lower at -14bps.
  • Swap rates are 1-3bps higher, with the 3s10s curve steeper.
  • Bills are -1 across the strip.
  • RBA-dated OIS pricing is flat to 2bps firmer for meetings beyond June leading.
  • (Bloomberg) Australia sold A$150 million of Feb-50 inflation-linked bonds. Investors offered to buy 2.68 times the amount of securities sold.

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