Dealing Cheaper On The Final Session Of The Year

ACGBs (YM -4.0 & XM -5.5) are cheaper on the final trading session of 2023 after US tsys finished the NY session with modest losses after a disappointing 7-year auction. Overbought conditions also probably encouraged some profit-taking ahead of the long weekend. US tsys finished 4-5bps cheaper across benchmarks. US tsys commenced the NY session on a weaker note, briefly firmed following higher-than-expected Initial Jobless Claims (218k vs. 210k est, 206k prior revised), before re-weakening post-auction.

• The S&P 500 came within 4 points of its record high in early trading before paring its advance and finishing the day 0.04% higher. The NASDAQ was off -0.03%. The DXY recovered from 4 days of losses.
• Cash ACGBs are 3-6bps cheaper, with the 3/10 curve steeper and the AU-US 10-year yield differential 1bp wider at +11bps.
• Swap rates are 3-4bps higher, with EFPs little changed.
• The bills strip is slightly cheaper, with pricing -1 to -3.
• RBA-dated OIS pricing is dealing mixed, but the moves are small across meetings.
• Today, the local calendar is empty.