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Little Changed Ahead Of Q2 CPI Tomorrow


ACGBs are little changed (YM flat & XM +1.5) in the Sydney session ahead of tomorrow’s release of Q2 CPI. There has been little by way of domestic drivers today as local participants digest news surrounding China’s July Politburo meeting.

  • US tsys are dealing 1-2bp richer across the major benchmarks in Tuesday's trade following yesterday's flow-induced bear flattening as several large block trades weighed in the NY session.
  • Cash ACGBs are flat to 1bp richer with the AU-US 10-year yield differential -5bp at +12bp.
  • Swap rates are flat to 1bp lower.
  • The bills strip twist steepens with pricing +1 to -3.
  • RBA-dated OIS pricing is flat to 2bp softer across meetings with a 58% chance of a 25bp hike priced for August.
  • Australian consumer confidence climbed last week amid increasing speculation that the Reserve Bank of Australia's record-breaking increase in the official cash rate over the last year is close to ending. Consumer confidence rose by 2.6% over the week, with renters leading the recovery in sentiment. (See link)

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