Firmer & Flatter On Global Impetus, Lowe Reiterates Stance

Futures firmed overnight, aided by the bid in U.S. Tsys and tighter COVID restrictions being put into place across some of the major Chinese cities.

• Local participants have reacted to Tuesday’s broader market moves, leaving YM +5.0 & XM +5.0, with both contracts extending through their post-Sydney peaks in recent dealing.
• Wider cash ACGB trade sees 4.5-6.0bp of richening.
• Bills print 1-4bp richer through the reds.
• Markets looked through RBA Governor Lowe’s dinner time address, as he pointed to familiar challenges while reiterating the idea that the Bank is not on a pre-set course when it comes to policy settings.
• In terms of local data, the rate of contraction observed in the latest flash services PMI print from S&P Global saw an acceleration, while the rate of expansion in the manufacturing reading slowed. The survey collator noted that “the mix of deteriorating demand and worsening price pressures does not bode well for the near-term outlook, and this has also been reinforced by the decline in private sector confidence in November.”
• Looking ahead, A$900mn of ACGB May-32 supply is due this morning, with any trans-Tasman spill over from the latest RBNZ decision also eyed (See previous bullets for more details on that particular risk event).