Muted Start To A Holiday Shortened Week

ACGBs (YM +1.0 & XM flat) are little changed after a subdued NY session for US tsys. The local market was closed Monday and Tuesday this week for the Christmas holiday period, with little domestic newsflow of note.

• US tsys dealings were muted after the long Christmas weekend, especially with Europe still closed. Also, there was nothing to drive direction. US tsys twist-flattened, pivoting at the 10s, with yields 3bps higher to 1bp lower. Volumes were light.
• Supply slate weighed on the short-end, with the 2-year yield closing 3bps higher at 4.305%.
• US equities finished in the green with gains of 0.43% on the Dow, 0.42% on the S&P 500, and 0.54% on the NASDAQ. The DXY slumped to the lowest level since July.
• AFR reported that US economists at Goldman Sachs argue for wage growth and inflation to ease in 2024 even as the economy overall outperforms consensus.
• Cash ACGBs are flat to 2bps richer, with the AU-US 10-year yield differential at +11bps.
• Swap rates are 1-3bps lower, with the 2s10s steeper.
• The bills strip is slightly firmer, with pricing flat to +2.
• RBA-dated OIS pricing is slightly mixed across meetings out to Dec’24.
• Today, the local calendar is empty.