Cheaper, Narrow Ranges, AOFM Post-MYEFO Update

ACGBs (YM -4.0 & XM -4.5) remain cheaper after dealing in relatively tight ranges in today’s Sydney session. With the local calendar empty, local participants are likely to remain on the sidelines, as they typically do, in a pre-US Non-Farm Payrolls Friday session.

• Bloomberg consensus sees nonfarm payrolls growth of 171k in December after November’s 199k was boosted by 38k workers returning from strikes. See MNI's NFP Preview here.
• Cash US tsys are dealing ~1bp richer in today’s Asia-Pac session after yesterday’s 5-8bps cheapening.
• Cash ACGBs are 3-4bps cheaper, with the AU-US 10-year yield differential 1bp tighter at +11bps.
• Swap rates are 3-4bps higher, with the 3s10s curve steeper.
• The bills strip is cheaper, with pricing flat to -5.
• RBA-dated OIS pricing is 1-4bps firmer for meetings beyond May.
• Following the Australian Government’s release of the Mid-Year Economic and Fiscal Outlook (MYEFO) in December 2023, the AOFM announced that Treasury Bond issuance for 2023-24 is planned to be around $50 billion (of which $23.6 billion has been completed). The planned issuance of Treasury Indexed Bonds in 2023-24 will be $2-4 billion (of which $1.25 billion has been completed).