Little Changed, Light Local Calendar, Narrow Ranges

In roll-impacted trading, ACGBs (YM +1.4 & XM +1.5) are slightly richer after dealing in narrow ranges in today’s Sydney session. Without domestic data catalysts, local participants appear to have been content to use US tsy dealings in today’s Asia-Pac session for directional guidance. Cash US tsys are dealing 1bp cheaper to 1bp richer, with a flattening bias.

• Cash ACGBs are 1-2bps richer, with the AU-US 10-year yield differential unchanged at -11bps.
• Swap rates are 1-2bps lower, with the 3s10s curve flatter.
• The bills strip is 2-3bps richer.
• RBA-dated OIS pricing is flat to 4bps softer across meetings, with late-24 leading. A cumulative 48bps of easing is priced by year-end.
• Tomorrow, the local calendar will see NAB Business Confidence, along with Panel Participation by RBA Assistant Governor (Economics) Sarah Hunter at the AFR Business Summit.
• Tomorrow, the AOFM plans to sell A$150mn of 0.25% Nov-32 inflation-linked bond.
• (AFR) Interest rates may be heading lower as inflationary pressures sparked by the pandemic recede, but they are unlikely to stay there as major geopolitical and macroeconomic forces will push them higher. (See link)