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AUSSIE BONDS: Cheaper Going Into Extended Xmas Break

AUSSIE BONDS
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ACGBs (YM -2.0 & XM -40.0) are cheaper after a heavy NY session for US tsys. Benchmark yields finished 3-7bps higher, with the 7-year leading, following mixed 2nd tier data.

  • The International Monetary Fund has warned of a significant risk that inflation will stop falling due to the strong jobs market and rapidly rising public sector demand, and called for spending restraint across all tiers of government. The IMF said higher-for-longer interest rates and broad-based government spending cuts may be needed if it appeared inflation was no longer on track to hit the RBA’s 2 per cent to 3 per cent inflation target.
  • Cash ACGBs are1-4bps cheaper with the AU-US 10-year yield differential at -14bps.
  • The bills strip is slightly cheaper with pricing -1 to -2 across contracts.
  • RBA-dated OIS pricing shows a 25bps rate cut more than fully priced by April (112%). A 58% chance is priced for February.
  • Today, the local calendar will see the release of the RBA Minutes of Dec. Policy Meeting. The local calendar market closes at 1410 AEDT ahead of the extended Xmas break.
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ACGBs (YM -2.0 & XM -40.0) are cheaper after a heavy NY session for US tsys. Benchmark yields finished 3-7bps higher, with the 7-year leading, following mixed 2nd tier data.

  • The International Monetary Fund has warned of a significant risk that inflation will stop falling due to the strong jobs market and rapidly rising public sector demand, and called for spending restraint across all tiers of government. The IMF said higher-for-longer interest rates and broad-based government spending cuts may be needed if it appeared inflation was no longer on track to hit the RBA’s 2 per cent to 3 per cent inflation target.
  • Cash ACGBs are1-4bps cheaper with the AU-US 10-year yield differential at -14bps.
  • The bills strip is slightly cheaper with pricing -1 to -2 across contracts.
  • RBA-dated OIS pricing shows a 25bps rate cut more than fully priced by April (112%). A 58% chance is priced for February.
  • Today, the local calendar will see the release of the RBA Minutes of Dec. Policy Meeting. The local calendar market closes at 1410 AEDT ahead of the extended Xmas break.