Mixed, Near Session Cheaps, RBA Bullock Speaks Tomorrow

ACGBs (YM -3.0 & XM flat) are dealing at or near session lows. Retail sales data for July printed stronger than expected, although additional spending at catering and takeaway food outlets linked to the 2023 FIFA Women’s World Cup and school holidays boosted the overall result.

• The cash ACGB curve has bear-flattened, with yields flat to 2bp higher. The AU-US 10-year yield differential is 1bp higher at -7bp, after dealing at -10bp earlier in the local session.
• Swap rates are higher, with pricing flat to 2bp higher. EFPs are little changed, with the curve flatter.
• The bills strip has bear-steepened, with pricing -1 to -5.
• RBA-dated OIS is 2-8bp firmer for meetings beyond November, with Sep’24 leading.
• S&P Global Ratings reported that home loan arrears remained very low in Q2 rising to 0.97% for prime mortgages from 0.95% in Q1 and falling to 3.47% for non-prime from 3.7% due to the number of loans increasing. However, Roy Morgan released data showing the number of people at risk of mortgage stress rising 642k on a year ago to a record 1.5mn in the 3 months to July. (The Australian)
• Tomorrow the local calendar sees a speech from RBA Governor-Elect Bullock, titled “Climate Change and Central Banks”. On Wednesday, the CPI Monthly for July is on tap.