Comfortably Lower Overnight

The bearish impetus observed in the wider core global FI space dragged Aussie bond futures lower in post-Sydney dealing, with modest bear steepening evident on the YM/XM curve after the early, UK CPI-driven bearish flattening impulse was unwound, aided by spill over from moves the U.S. Tsy market. That leaves YM -7.5 & XM -8.0 shortly after the Sydney re-open, in line with late overnight levels, a little above post-Sydney lows. Meanwhile, Bills run 2-11bp cheaper through the reds, with the back end of the whites and front end of the reds leading the weakness.

• The latest monthly labour market report provides the highlight of the domestic docket on Thursday, with the BBG median for headline employment looking for a reading of +25K vs. the +88.4K seen in July, alongside a steady unemployment print of 3.5% and no change in the participation rate, which printed at 66.8% in July.