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AUSSIE BONDS: Cheaper With US Tsys, Light Holiday Volumes

AUSSIE BONDS
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ACGBs (YM -3.0 & XM -7.0) are cheaper, with the 3/10 curve steeper, after US tsys finished mostly cheaper on Friday. However, light holiday volumes persisted with the Mar'25 10Y contract (TYH5) dealing in a 10-tic range.

  • US short-end bid helped projected Fed rate cuts into early 2025 gain slightly vs. prior (*) as follows: Jan'25 steady at -2.7bp, Mar'25 -13.3bp (-13.1bp), May'25 -18.5bp (-17.7bp), Jun'25 -26.5bp (-25.7bp).
  • Markets will be closed on Wednesday for the New Year's Day holiday. US data this week includes MNI PMI and Pending Home Sales on Monday, FHFA housing data on Tuesday, weekly claims and construction spending on Thursday, and ISMs on Friday.
  • Cash ACGBs are2-7bps cheaper with the AU-US 10-year yield differential at -18bps.
  • Swap rates are 1-6bps higher, with the 3s10s curve steeper.
  • The bills strip is slightly weaker, with contracts flat to -1.
  • RBA-dated OIS pricing is little changed. A 25bps rate cut is more than fully priced by April (130%), with a 63% probability of a February cut.
  • Today, the local calendar will see RBA's Jones-Fireside Chat at Conexus at the Superannuation Chair Forum. The next data releases are CoreLogic Home Value and S&P Global PMI Mfg on January 2. 
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ACGBs (YM -3.0 & XM -7.0) are cheaper, with the 3/10 curve steeper, after US tsys finished mostly cheaper on Friday. However, light holiday volumes persisted with the Mar'25 10Y contract (TYH5) dealing in a 10-tic range.

  • US short-end bid helped projected Fed rate cuts into early 2025 gain slightly vs. prior (*) as follows: Jan'25 steady at -2.7bp, Mar'25 -13.3bp (-13.1bp), May'25 -18.5bp (-17.7bp), Jun'25 -26.5bp (-25.7bp).
  • Markets will be closed on Wednesday for the New Year's Day holiday. US data this week includes MNI PMI and Pending Home Sales on Monday, FHFA housing data on Tuesday, weekly claims and construction spending on Thursday, and ISMs on Friday.
  • Cash ACGBs are2-7bps cheaper with the AU-US 10-year yield differential at -18bps.
  • Swap rates are 1-6bps higher, with the 3s10s curve steeper.
  • The bills strip is slightly weaker, with contracts flat to -1.
  • RBA-dated OIS pricing is little changed. A 25bps rate cut is more than fully priced by April (130%), with a 63% probability of a February cut.
  • Today, the local calendar will see RBA's Jones-Fireside Chat at Conexus at the Superannuation Chair Forum. The next data releases are CoreLogic Home Value and S&P Global PMI Mfg on January 2.