Cheaper On Global Cues, Domestic Dokcet Picks Up

ACGBs have looked to the cheapening in U.S. Tsys & German Bunds since Tuesday’s local close, with the major bond futures trading just above their respective overnight bases, leaving YM -5.0 & XM -6.0 early on. Meanwhile, wider cash ACGBs run 4-6bp cheaper across the curve, bear steepening.

• Heavy $ & EUR issuance schedules provided the pressure points of note for the Tsy & EGB spaces, while Fed Chair Powell’s latest round of communique provided little impetus., given that it was light on meaningful monetary policy rhetoric.
• Local news flow has been limited at best since the Sydney close.
• Bills are 2-3bp cheaper through the reds.
• RBA dated OIS is little changed to start the day, with ~20bp of tightening priced for the Feb ’23 meeting, alongside a terminal cash rate of ~3.90%.
• The local data docket picks up today, with the recently established monthly inflation metric expected to accelerate in both headline and trimmed mean Y/Y terms, to +7.2% & +5.5%, respectively, although questions surrounding seasonality and the newness of the dataset may result in trouble when it comes to market digestion.
• Elsewhere, retail sales data is expected to continue to paint to a resilient consumer base, seen +0.6% M/M (all expectations are based on BBG survey medians).