Cheaper, Steeper Curve, Fresh US 10Y Yield High

ACGBs (YM -3.0 & XM -8.0) are cheaper, with the futures curve steeper. Higher than expected JOLTS data drove a further bear steepening for the US tsys curve, with the 10-year yield pushing to a fresh cycle high of 4.8081% (12bps higher on the day). The 2-year yield was up 5bps to 5.15%.

• US job openings unexpectedly rose sharply by 690k in August to 9.6m, breaking a run of declines. However, the quits rate was unchanged at 2.3%, matching the lowest level since 2020, consistent with workers remaining less confident in their ability to find another job in the current market.
• Fed Mester did little to dissuade the tsy sell-off. In contrast, Fed Bostic struck a more cautionary view: “I am not in a hurry to raise, but I am not in a hurry to reduce either.”
• Cash ACGBs are 3-8bps cheaper, with the AU-US 10-year yield differential 2bps lower at -18bps.
• Swap rates are 3-7bps higher, with EFPs tighter.
• The bills strip has bear-steepened, with pricing flat to -4.
• RBA-dated OIS pricing is 1-4bps softer across meetings.
• Judo Bank Services and Composite PMIs (Final) printed 51.8 and 51.5 respectively versus 47.8 and 48 prior.
• Today the AOFM plans to sell A$800mn of the 2.75% 21 June 2035 bond.