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Cheaper, Narrow Range, Confidence Data Fails To Move Market

AUSSIE BONDS

ACGBs (YM -2.0 & XM -2.0) are weaker after trading in a narrow range during the Sydney session.

  • Westpac consumer sentiment declined -0.4% m/m but current conditions rose 1.7% m/m to 71.7. Expectations declined 1.5% m/m. Elsewhere, Bloomberg reports that NAB business conditions showed ongoing resilience to higher interest rates, defying expectations of a sharp economic slowdown, even as consumer sentiment remains “deeply pessimistic.” Business conditions, which measure sales, employment and profitability, eased a tad to 10 points in July. Confidence advanced to 2 points. (See link)
  • The long end of the tsy curve has extended gains through the Asian session, perhaps today's slated 3-year issuance is weighing on the short end. Ranges do remain narrow with little follow through, little meaningful macro news flow has crossed. This leaves cash tsys flat to 4 bps richer, the curve has bull flattened.
  • Cash ACGBs are 9-11bp richer after being closed yesterday for the NSW bank holiday. The AU-US 10-year yield differential is at +2bp.
  • Swap rates are 1-3bp higher with the 3s10s curve flat.
  • The bills strip is slightly richer with pricing +1 to +2.
  • RBA-dated OIS pricing is little changed.

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