Looking Further Afield For Impetus

There has been little in the way of meaningful idiosyncrasies to drive the ACGB space thus far, with YM -10.5 & XM -6.5 at typing, moving away from overnight/early Sydney lows on the wider impulse observed in core global FI markets, with regional participants perhaps willing to fade Tuesday’s European/NY cheapening. Cash ACGBs sit 2.5-11.0bp cheaper across the curve, with bear flattening in play. Local data was headlined by a modest beat for retail sales volumes covering Q2, which was accompanied by a downside revision to the Q1 reading, although the space shrugged off that release, with focus on the health of Australian consumer and knock-on impact for RBA policy in the months ahead. NZ labour market data from across the Tasman also had little in the way of lasting impact.