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Little Changed After Wages Data


ACGBs (YM flat & XM flat) are sitting flat but 1bp cheaper after the release of Wages Price Index (WPI) data for Q4. The wage price index rose 0.9% q/q (estimate +0.9%) in Q4 versus +1.3% in Q3. Wage price index rose 4.2% y/y in Q4 (estimate +4.1%) versus revised +4.1% in Q3.

  • Michelle Marquardt, ABS head of prices statistics, said: “For both the public and private sector, wages growth was driven by organisation-wide annual wage and salary reviews. Wage growth for December quarter 2023 saw a higher contribution from jobs covered by enterprise agreements than is typically recorded for a December quarter."
  • Cash ACGBs are 1bp cheaper after the data, with the AU-US 10-year yield differential +1bp at -10bps.
  • Swap rates are flat to 1bp higher on the day, with the 3s10s curve steeper.
  • The bills strip is richer, with pricing flat to +2.
  • RBA-dated OIS pricing is little changed on the day. A cumulative 39bps of easing is priced by year-end.

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