Off Early Cheaps

Aussie bonds have edged away from early cheaps ahead of the release of the RBA’s July meeting minutes (in ~45 minutes), with the move aided by a light bid in U.S. Tsys. This has allowed the impulse from ANZ’s call for 50bp rate hikes at each of the next four RBA meetings to fade. Cash ACGBs run 1.0-3.5bp cheaper across the curve, bear steepening, while YM and XM are -3.0 and -4.0, off early lows, and operating within their respective overnight ranges. Bills run 3 to 6 ticks lower through the reds.

• When it comes to the release of the RBA’s July meeting minutes, participants will be on the lookout for discussion surrounding larger than 50bp rate hikes. STIR markets now point to ~57bp of tightening at the RBA’s Aug meeting, moderating from last week’s ~64bp extremes. A reminder that the peak in pricing re: RBA tightening in August came about on the back of a strong labour market report and the front-loading of Fed rate hike expectations.