Cheaper & Flatter On U.S. Tsy Moves, Lowe Due Tuesday

It has all been about offshore market gyrations since Monday’s Sydney close, with the previously touted uptick in Fed rate hike expectations resulting in the bear flattening of the Aussie bond futures curve. This leaves YM -14.5 & XM -11.5 in early Sydney trade, with the former extending through its overnight low, while the latter’s overnight trough has held.

• The weekly ANZ-Roy Morgan consumer confidence metric has already hit, with familiar matters driving the index to the lowest level observed since Sep ’20 (when Victoria’s second COVID wave was biting). Within the release ANZ noted that “the continued rapid increases in petrol prices saw inflation expectations rise to 6.0%. Increasing petrol prices have had a sharp impact on households’ confidence for both ‘current’ and ‘future financial conditions’… The weakness in consumer sentiment is at odds with the strength in employment and reflects pressure on household budgets as nominal wage growth lags the jump in inflation. The weakness in consumer confidence presents a growing near-term risk to the outlook for household spending.”
• Note that RBA Governor Lowe will speak at 12:00 Sydney/01:00 London (per the RBA website), at the Walkley Awards for Business Journalism. Elsewhere, A$100mn of index-linked Sep-30 supply is due from the AOFM.