Little Changed After Domestic Data Drop

ACGBs (YM +6.0 & XM +5.0) are little changed after today’s domestic data drop.

• Retail Sales rose 1.1% m/m (estimate +1.5%) in January versus a revised -2.1% in December. Ben Dorber, ABS head of retail statistics, said: "The rebound in January follows a sharp fall in December when consumers pulled back on spending after taking advantage of Black Friday sales in November. Retail turnover is now back at a similar level to September 2023.
• Capex rose 0.8% q/q (estimate +0.5%) in 4Q versus revised +0.3% in 3Q. Equipment, Plant and Machinery investment fell 0.1% q/q, while Buildings and Structures investment rose 1.5% q/q.
• Private Sector Credit rose 0.4% m/m in January, in line with market expectations.
• Cash ACGBs are little changed after the data to be 5-6bps richer on the day. The AU-US 10-year yield differential is flat on the day at -15bps.
• Swap rates are 5-6bps lower on the day.
• The bills strip has bull-flattened further, with pricing flat to +6.
• RBA-dated OIS pricing is flat to 3bps softer across meetings. A cumulative 38bps of easing is priced by year-end.