Marginally Cheaper Bias To Start

Two-way trade in the final overnight session of last week eventually saw Aussie bond futures finish a touch below their respective Sydney settlement levels. The major contracts operate around their overnight session closes at typing, leaving YM -1.0 & XM -1.0, with the latter having a brief and limited foray lower in early dealing as participants reacted to the cheapening observed in wider core global FI markets on Friday. Cash ACGBs are ~1bp cheaper across the curve.

• Bills are 2-6bp cheaper through the reds, with the back end of the whites and front end of the reds leading the move.
• Looking at RBA dated OIS, 20-21bp of tightening remains priced for the Feb ’23 meeting, while terminal cash rate expectations are a touch higher on the day, showing just above 3.75%.
• There hasn’t been much in the way of meaningful domestic news flow over the weekend. Macro news flow was headlined by China marking its COVID-19 death toll notably higher.
• Pre-BoJ meeting speculation and the related market moves will likely form the focal point of Asia-Pac dealing on Monday.
• Melbourne Institute inflation metrics headline the domestic docket today. Further out, highlights of this week’s local data calendar include the monthly labour market report, consumer inflation expectations data and the Westpac consumer confidence reading.