Holds Post-RBA Sell-Off Ahead Of Tomorrow’s RBA Gov Speech

ACGBs (YM -7.0 & XM -6.5) are cheaper and trading near Sydney session lows, having moved within relatively narrow ranges. With a light domestic calendar, the local market has focused on the 2-5bp cheapening in US tsys during today’s Asia-Pacific session, following yesterday’s sharp sell-off.

• After RBA Governor Bullock's press conference yesterday, the appearances of RBA staffers Hunter and Cassidy before the Senate Select Committee on the Cost of Living did not impact the market.
• Cash ACGBs are 6bps cheaper on the day and 9-14bps cheaper than pre-RBA decision levels. The AU-US 10-year yield differential is flat at +17bps.
• Today’s auction demonstrated solid pricing for ACGBs, with the weighted average yield coming in below prevailing mid-yields and the cover ratio increasing to 3.3813x.
• Swap rates are 5-7bps higher.
• The bills strip has bear-steepened, with pricing -2 to -10.
• RBA-dated OIS pricing is 3-9bps firmer across meetings beyond September today, with mid-2025 leading. Today’s move leaves pricing 6-21bps firmer across meetings than pre-RBA levels. A cumulative 19bps of easing is priced by year-end versus 30bps before the RBA decision.
• Tomorrow, the local calendar will see a speech by RBA Governor Bullock and Foreign Reserves data.