MNI China Daily Summary: Thursday, January 9

MNI: BAVARIA DEC CPI 3.0% Y/Y (FLASH WAS 3.2%)

MNI: GERMANY NOV EXPORTS +2.1% M/M

MNI BOJ: 2 OUT OF 9 JAPAN REGIONS UP ECON VIEW FROM OCT

MNI: PBOC Net Drains CNY20.7 Bln via OMO Thursday

MNI: PBOC Sets Yuan Parity Lower At 7.1886 Thurs; -2.34% Y/Y

MNI: GERMANY NRW DEC CPI +0.5% M/M, +2.5% Y/Y

MNI: GERMANY NOV IND PROD +1.5% M/M

MNI:AUSTRALIA NOV TRADE BALANCE A$+7079

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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AUSSIE BONDS: Holding Richer After CPI Data But Off Bests

AUSSIE BONDS
BulletAPACFixed Income BulletsAustraliaMarkets

ACGBs (YM flat & XM -4.0) are mixed but 2-4bps stronger versus pre-CPI Monthly levels.

  • While November headline inflation picked up 0.2pp to 2.3% y/y, the focus was on trimmed mean today given current state & federal electricity rebates. This underlying measure eased 0.3pp to 3.2% to where it was in September.
  • However, the RBA continues to focus on quarterly CPI data and it wants to be confident that inflation will return sustainably to the band. It is too early to tell if monthly inflation is trending lower again, thus attention will be firmly on Q4 CPI on January 29.
  • Cash ACGBs are flat to 4bps cheaper, with a steeper curve. The AU-US 10-year yield differential is at -17bps.
  • The swaps curve has bear-steepened, with rates flat to 4bps higher.
  • The bills strip is slightly mixed, but 1-3bps richer after the data.
  • RBA-dated OIS pricing is 1-4bps softer across meetings after the data, with July leading. A 25bp rate cut is back to being more than fully priced by April (117%), with the probability of a February cut standing at 64%.
  • Before the data, the likelihood of a 25bp cut in April had slipped to 98%.
  • The local calendar shows retail sales and trade balances tomorrow.
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ACGBs (YM flat & XM -4.0) are mixed but 2-4bps stronger versus pre-CPI Monthly levels.

  • While November headline inflation picked up 0.2pp to 2.3% y/y, the focus was on trimmed mean today given current state & federal electricity rebates. This underlying measure eased 0.3pp to 3.2% to where it was in September.
  • However, the RBA continues to focus on quarterly CPI data and it wants to be confident that inflation will return sustainably to the band. It is too early to tell if monthly inflation is trending lower again, thus attention will be firmly on Q4 CPI on January 29.
  • Cash ACGBs are flat to 4bps cheaper, with a steeper curve. The AU-US 10-year yield differential is at -17bps.
  • The swaps curve has bear-steepened, with rates flat to 4bps higher.
  • The bills strip is slightly mixed, but 1-3bps richer after the data.
  • RBA-dated OIS pricing is 1-4bps softer across meetings after the data, with July leading. A 25bp rate cut is back to being more than fully priced by April (117%), with the probability of a February cut standing at 64%.
  • Before the data, the likelihood of a 25bp cut in April had slipped to 98%.
  • The local calendar shows retail sales and trade balances tomorrow.