Futures Bid Overnight; RBA Gov. Lowe’s Speech Eyed

Aussie bond futures tracked the bid in global core FI markets on Wednesday, with the move higher in the latter derived from an uptick in growth-related worry (fleshed out elsewhere).

• Cash ACGBs run 7.5-9.0bp richer across the curve as cash has played catch up to the bid in futures, with the 4- to 7-Year zone leading the way higher.
• YM and XM are +8.5 apiece, challenging their respective overnight highs at writing. The 3-/10-Year EFP box is steeper, with 3-Year EFP narrowing and 10-Year EFP little changed, while Bills run flat to 10 ticks richer through the reds.
• STIR markets now price is ~32bp of tightening for the RBA’s Oct policy meeting, continuing to edge lower after Tuesday’s decision, reflecting expectations from some quarters for less “aggressive” hikes at incoming meetings.
• Looking ahead, Australian trade data for July is due, although focus is expected to centre around Gov. Lowe’s speech on “Inflation and the Monetary Policy Framework”, as well as the Q&A after.