Light Calendar, Narrow Ranges, Limited Impact From Middle East

ACGBs (YM flat & XM +1.0) are flat after dealing in narrow ranges in today’s Sydney session. The local market was closed on Friday in observance of the Australia Day holiday. With the domestic calendar empty today, the focus has been abroad following the weekend’s events in the Middle East. Nevertheless, the bond market's reaction has so far been muted, with cash US tsys dealing little changed in today’s Asia-Pac session.

• (AFR) Treasurer Jim Chalmers says he will discuss the investment direction of the $212 billion Future Fund with incoming chairman Greg Combet, after both the Labor figures previously backed the $3.5 trillion superannuation sector playing a more active role in funding the energy transition. (See Bloomberg link)
• Cash ACGBs are 3-4bps richer relative to Thursday’s close, with the AU-US 10-year yield differential 1bp tighter at +8bps.
• Swap rates are 2-4bps lower, with the 3s10s curve steeper.
• The bills strip is little changed, with pricing flat to +2.
• RBA-dated OIS pricing is flat to 4bps softer across meetings, with December leading. A cumulative 43bps of easing is priced by year-end.
• December retail sales are out tomorrow. The main focus will however be Wednesday's CPI print for Q4, which comes before next week's RBA meeting.