Post-Powell Bid Reverberates

The post-Powell impulse has dragged Aussie bond yields lower, with the front end leading the bid as some of the edge comes off of Fed, and in spill over, RBA pricing.

• That leaves YM +10.0 & XM +6.0, with both contracts just above their respective Sydney peaks after an extension higher at the local open built on the late overnight session rally. Wider cash ACGBs run 2-10bp richer, with bull steepening apparent.
• Bills are 1-10bp richer through the reds, with RBA dated OIS pricing ~19bp of tightening for next week’s RBA decision and a terminal cash rate of ~3.65%.
• CoreLogic house price data revealed a continued decline in house prices, as the housing market corrects alongside ongoing monetary tightening from the RBA.
• Meanwhile, final manufacturing PMI data revealed a modest expansion that was pretty much in line with the flash reading. Survey collators S&P Global noted that “Both sales and output rose at weaker rates, whilst employment growth softened. Business sentiment was also affected by a double whammy of rising costs and supply issues, adding to fears that we may see further slowdowns unless there is a material improvement in demand. More positively, however, price pressures within the goods producing sector did ease over the month.”
• Looking ahead, Q3 capex data headlines the domestic docket today.