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AUSSIE BONDS: Post-Presser Sell-Off Extends After A Heavy Session For US Tsys

AUSSIE BONDS
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ACGBs (YM -1.0 & XM -2.0) are modestly weaker, extending yesterday’s post-RBA presser sell-off.

  • US data was mixed overnight, with Empire State manufacturing beating and NAHB sentiment missing.
  • Cash US tsys bear-steepened after Monday's holiday: the 2-Yr yield up 4bps at 4.30%, 5-Yr up 7bps at 4.40%, 10-Yr up 7bps at 4.55%, and 30-Yr up 7bps at 4.77%.
  • Cash ACGBs are1-2bps cheaper with the AU-US 10-year yield differential at -3bps.
  • Swap rates are flat to 1bp higher.
  • The bills strip little changed.
  • Yesterday, RBA Governor Bullock noted the labour market’s unexpected strength and cautioned that market expectations for further rate cuts are not guaranteed.
  • RBA-dated OIS pricing is slightly firmer today, but 1-9bps firmer versus yesterday’s pre-RBA levels, with late 2025 leading. A 25bp rate cut in April is given a 20% probability, with a cumulative 45bps of easing priced by year-end.
  • Today, the local calendar will see Q4 wages, ahead of January jobs data tomorrow.
  • The Q4 WPI is forecast to post another 0.8% q/q rise bringing the annual rate down to 3.2% from 3.5% in Q3. January employment is projected at +20k, with the unemployment rate rising 0.1pp to 4.1%.
  • AOFM plans to sell A$800mn of the 2.75% 21 June 2035 bond today. 
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ACGBs (YM -1.0 & XM -2.0) are modestly weaker, extending yesterday’s post-RBA presser sell-off.

  • US data was mixed overnight, with Empire State manufacturing beating and NAHB sentiment missing.
  • Cash US tsys bear-steepened after Monday's holiday: the 2-Yr yield up 4bps at 4.30%, 5-Yr up 7bps at 4.40%, 10-Yr up 7bps at 4.55%, and 30-Yr up 7bps at 4.77%.
  • Cash ACGBs are1-2bps cheaper with the AU-US 10-year yield differential at -3bps.
  • Swap rates are flat to 1bp higher.
  • The bills strip little changed.
  • Yesterday, RBA Governor Bullock noted the labour market’s unexpected strength and cautioned that market expectations for further rate cuts are not guaranteed.
  • RBA-dated OIS pricing is slightly firmer today, but 1-9bps firmer versus yesterday’s pre-RBA levels, with late 2025 leading. A 25bp rate cut in April is given a 20% probability, with a cumulative 45bps of easing priced by year-end.
  • Today, the local calendar will see Q4 wages, ahead of January jobs data tomorrow.
  • The Q4 WPI is forecast to post another 0.8% q/q rise bringing the annual rate down to 3.2% from 3.5% in Q3. January employment is projected at +20k, with the unemployment rate rising 0.1pp to 4.1%.
  • AOFM plans to sell A$800mn of the 2.75% 21 June 2035 bond today.