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Expiries for Nov29 NY cut 1000ET (Source DTCC)


EGB/Gilt: Markets Reverse Course Following Friday Risk-Off


(Z1)‌‌ Remains Above Last Week’s Lows

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The aggressive post-CPI twist flattening of the futures curve extended in overnight dealing, leaving YM -10.5 and XM +1.5 come the close of post-Sydney dealing.

  • Thursday's focus will squarely fall on the RBA and whether it decides to purchase ACGB Apr-24 after the post-CPI surge in yields saw the line close at 0.2075% on Wednesday (over 10bp above the RBA's 0.10% target). Indeed, ACGB Apr-23 (another bond that the RBA imposed higher repo rates on at the start of last week) closed at 0.1925%. If the RBA does not act over the coming couple of sessions then speculation re: alterations to the YCT mechanism will become more widespread ahead of next week's RBA meeting.
  • A reminder that our policy team ran a piece flagging their understanding that yesterday's CPI reading is unlikely to change the RBA's view on the timing of any future interest rate hike. Still, there have been a couple of notable sell side names that have rolled forward their cash rate hike calls (we will flesh these out in short order).
  • The quarterly terms of trade data and an appearance from RBA Deputy Governor Debelle & Assistant Governor Bullock in front of the Senate Economics Legislation Committee headline the local docket on Thursday.