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AUSSIE BONDS: Heavy Session On A Newsflow Light Day, AUD At 2022 Lows

AUSSIE BONDS

ACGBs (YM -6.0 & XM -7.5) are holding weaker and hovering near Sydney session lows on the first trading day of 2025

  • With the local calendar fairly light (House Prices and Manufacturing PMI), current weakness may be influenced by light holiday trading volumes and movements in US tsy futures.  TYH5 is currently dealing -0-01+ at 108-22+ after trading as low at 108-18 in the As-a-Pac session. There has been no cash US tsy dealing in today’s Asia-Pac session with Japan out for an extended New Year’s break.
  • The AUD has approached its 2022 low of 0.6170 against the USD today, trading as low as 0.6183 before recovering slightly to around 0.6215. Analysts attribute this weakness to several factors, including economic challenges in China, a strengthening US dollar, and potential trade policies from the incoming US administration.
  • Cash ACGBs are 5-7bps cheaper, with the 3/10 curve steeper.
  • Swap rates are 5bps higher.
  • The bills strip is slightly cheaper, with pricing -1 to -3.
  • RBA-dated OIS pricing is flat to 2bps firmer across meetings. A 25bps rate cut is more than fully priced by April (124%), with the chances of a February cut at 59%.
  • Tomorrow, the local calendar is empty. The next release is the S&P Global Composite & Services PMIs on Monday. 
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ACGBs (YM -6.0 & XM -7.5) are holding weaker and hovering near Sydney session lows on the first trading day of 2025

  • With the local calendar fairly light (House Prices and Manufacturing PMI), current weakness may be influenced by light holiday trading volumes and movements in US tsy futures.  TYH5 is currently dealing -0-01+ at 108-22+ after trading as low at 108-18 in the As-a-Pac session. There has been no cash US tsy dealing in today’s Asia-Pac session with Japan out for an extended New Year’s break.
  • The AUD has approached its 2022 low of 0.6170 against the USD today, trading as low as 0.6183 before recovering slightly to around 0.6215. Analysts attribute this weakness to several factors, including economic challenges in China, a strengthening US dollar, and potential trade policies from the incoming US administration.
  • Cash ACGBs are 5-7bps cheaper, with the 3/10 curve steeper.
  • Swap rates are 5bps higher.
  • The bills strip is slightly cheaper, with pricing -1 to -3.
  • RBA-dated OIS pricing is flat to 2bps firmer across meetings. A 25bps rate cut is more than fully priced by April (124%), with the chances of a February cut at 59%.
  • Tomorrow, the local calendar is empty. The next release is the S&P Global Composite & Services PMIs on Monday.