Futures A Touch Lower In Holiday-Thinned Trade, Tuesday’s RBA Meeting Eyed

Futures nudge lower at the start of the new week. YM is -0.5 & XM is -3.0. This comes after Friday’s uptick in U.S. Tsy yields allowed futures to pullback from their respective overnight peaks. Bills run -1 to +2 through the reds.

• A reminder that liquidity will be impaired on Monday, with NSW & ACT observing the Labour Day holiday, which also results in the closure of cash ACGBs.
• Broader weekend news flow was dominated by the continued fallout from the fiscal situation in the UK, a positive military advance for Ukraine and continued speculation re: a sizeable production cut from the OPEC+ group when it meets later this week.
• Final m’fing PMI data headlines Monday’s domestic docket, with Melbourne Institute inflation data also due.
• The RBA decision headlines the domestic docket this week. We think that the data and RBA communique point to a final 50bp hike at the meeting.
• RBA Governor Lowe told the House of Representative Standing Committee on Economics that the board will discuss both a 25bp and 50bp rise in the cash rate at its October meeting, with the minutes of the September meeting showing that these were the outcomes discussed at that time as well. 16 of the 21 surveyed by Bloomberg look for a 50bp step. The market has ~44bp of tightening priced. Our full preview of the event will be published later today).