Firmer Overnight

The bullish steepening impulse observed in the wider core global FI space supported Aussie bond futures in post-Sydney dealing, leaving YM +12.5 & XM +7.5 shortly after the Sydney re-open, a touch above late overnight levels, but shy of their respective overnight peaks. It is a similar story when we look at the Bill strip, which trades 5-15bp richer through the reds,

• The latest CoreLogic house price reading saw a 0.8% fall in M/M terms, the second consecutive monthly fall as tighter financial conditions start to weigh on Australian property prices.
• The final m’fing PMI print headlines the domestic economic today, although it isn’t usually a market mover. Note that the release of the Chinese Caixin m’fing PMI will provide a focal point from further afield. We will also get the release of the AOFM’s weekly issuance slate.
• Participants will already be focusing on the setup into next week’s RBA decision, with 44bp of tightening priced into the IB strip, while the sell-side consensus looks for a 50bp hike.