Cheaper But Well Off Lows, IMF Reports’ Impact Proves Fleeting

ACGBs (YM -3.0 & XM -3.5) are dealing cheaper but well above Sydney session lows. Without domestic data drivers, the local market largely drifted with dealings in US tsys in today’s Asia-Pac session. Cash US tsys are currently dealing 1-2bps cheaper.

• Later today will see U. of Mich. Sentiment, Existing Home Sales and Total Net TIC Flows. Also, Fed's Goolsbee Speaks on CNBC, and Fed's Daly Speaks on Fox Business and in Fireside Chat.
• Earlier in the session, ACGBs were pressured by AFR reports that the IMF had advised the RBA that it should lift interest rates further and the Albanese government must deliver federal and state spending cuts to reduce inflation to target before 2026 (See link). However, this negative catalyst proved short-lived.
• Cash ACGBs are 2-3bps cheaper, with the AU-US 10-year yield differential 4bps tighter at +14bps.
• Swap rates are 2-3bps higher, with the 3s10s curve steeper.
• The bills strip is cheaper, with pricing flat to -4.
• RBA-dated OIS pricing is little changed across meetings out to September and 2bps firmer beyond. A cumulative 35bps of easing is priced by year-end.
• The local calendar is empty on Monday.
• The AOFM plans to sell A$800mn of 3.00% Nov-33 bond next Wednesday.