Hovering Near Session Cheaps Despite Weakish Data

ACGBs (YM -8.0 & XM -8.5) are hovering near the lows of the Sydney session, despite a generally soft release of domestic data. As previously mentioned, August retail sales slightly underperformed expectations (+0.2% m/m versus an estimated +0.3%), and job vacancies experienced an 8.9% decline q/q in the three months leading up to August. With US tsys richer in Asia-Pac trading, the afternoon dip in ACGBs appears to be more of a correction following their earlier outperformance relative to US tsys.

• Cash ACGBs are 7-8bps cheaper, with the AU-US 10-year yield differential 1bp lower at -14bps.
• Swap rates are 6bps higher on the day.
• The bills strip bear-steepens, with pricing -1 to -10.
• RBA-dated OIS pricing is 3-6bps firmer on the day for '24 meetings.
• Tomorrow the local calendar sees Private Sector Credit data for August.
• Tomorrow the AOFM plans to sell A$800mn of the 2.25% 21 May 2028 bond.
• Households have drawn down on their bank account savings for the first time since the last major interest rate tightening cycle in 2007, as higher borrowing costs also squeeze retail spending. (See link)