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Holding Sharply Cheaper, Infl. Expns. Higher, Job Vacancies Lower

AUSSIE BONDS

ACGBs (YM -9.0 & XM -10.5) are holding cheaper but off the session’s worst levels.

  • MI June Inflation Expectations rose to 4.4% from 4.1% in May.
  • Job vacancies fell 2.7% q/q in three months to May. The drop in vacancies followed a fall of 6.2% between February and last November. May marked two years since a peak in job vacancies in May 2022, with vacancies falling 26.0% over that period, the ABS said.
  • Cash ACGBs are 8-10bps cheaper, with the AU-US 10-year yield differential at +7bps, the highest since February.
  • Swap rates are sharply higher with the 3s10s curve steeper.
  • The bills strip has bear-steepened, with pricing -5 to -11.
  • RBA-dated OIS pricing is 9-29bps firmer than pre-CPI levels across meetings, with 2025 meetings leading. The market now attaches a 55% chance that the RBA will hike 25bps in August. A cumulative 21bps of tightening is priced by September.
  • RBA Hauser will give a speech today aftermarket.

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