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Near Session Bests Ahead of Gov. Lowe’s Address

AUSSIE BONDS

ACGBs are holding near session highs (YM +5.0 & XM +3.5) ahead of RBA Governor Lowe’s address to The National Press Club in Sydney (0330) despite US Tsys being marginally cheaper (yields 1-2bp higher) in early Asia-Pac trade.

  • Cash ACGBs are 4-5bp richer with the AU/US 10-year yield differential at -13bp.
  • Swap rates are 6-7bp lower with EFPs 2bp tighter.
  • Bills strip pricing is 3-11bp richer with reds leading.
  • RBA-dated OIS pricing is 3-6bp softer for meetings beyond September. May meeting pricing has attached a 20% chance of a 25bp hike with 33bp of easing priced by February 2024.

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