Holding Cheaper, Near Session Lows, Q3 PPI & Sep-26 Supply Tomorrow

ACGBs (YM -7.0 & XM -14.0) are sharply weaker and near Sydney session lows. With the data calendar being relatively light today, the focus was on RBA Governor Bullock’s appearance before the Senate Economics Committee. Unfortunately, for a market that was looking for clues on the outlook for policy following yesterday’s higher-than-expected CPI data, Bullock didn’t give anything away regarding the likely outcome of the November 7 meeting. She said the bank’s forecasts will be altered in November but it’s too early to say whether there will be a “material” change in the inflation outlook and thus the return to target.

• Cash US tsys' twist-steepening in today’s Asia-Pac session, pivoting at the 10s, also likely weighed on longer-dated ACGBs.
• Cash ACGBs are 6-14bps cheaper on the day, with the AU-US 10-year yield differential 6bps higher at -10bps.
• The swaps curve has bear-steepened, with rates 5-13bps higher.
• The bills strip has twist-steepened, with pricing +2 to -7.
• RBA-dated OIS pricing is flat to 4bps softer across meetings, but remains 6-12bps firmer from pre-CPI levels.
• Tomorrow, the local calendar shows Q3 PPI data.
• Tomorrow, the AOFM plans to sell A$800mn of the 0.50% 21 September 2026 bond.
• Fitch Ratings has affirmed the 'AAA' Ratings for NSW and TCorp. The Outlook is Stable.