Cheaper, Narrow Ranges, Light Local Calendar

ACGBs (YM -6.0 & XM -11.5) are sharply cheaper after dealing in relatively narrow ranges so far in the Sydney session. With the domestic calendar light today, local participants have likely been on headlines and US tsys watch.

• On the domestic front, the AFR article reported Former Reserve Bank governor Ian Macfarlane telling bond traders they will be wrong yet again in betting that the central bank will be cutting interest rates before the end of next year. He added that market pricing could be only justified “if inflation fell sharply or if there was a deep recession.” (See link)
• US tsys have ticked away from lows seen in yesterday's NY session as losses are trimmed in early Asia-Pac trade on Friday. Perhaps participants are using the opportunity to close short positions. This leaves cash tsys ~1bp richer across the major benchmarks. TYZ3 deals at 107-12+, +0-05, at the top of the 0-03+ range observed this morning.
• Cash ACGBs are 6-12bps cheaper, with the AU-US 10-year yield differential 1bp higher at -19bps.
• Swap rates are 5-11bps higher, with the 3s10s curve steeper and EFPS ~1-2bps tighter.
• The bills strip has bear-steepened, with pricing is -2 to -6.
• RBA-dated OIS pricing is 1-4bp firmer across meetings, with Nov’24 leading.