Pressure Remains Evident

YM & XM drift back towards their overnight lows after an early uptick. A reminder that a clean break below the respective overnight bases would expose the cycle troughs witnessed back in mid-June. Cash ACGBs run 14-22bp cheaper across the curve, with a fresh bear flattening impulse asserting itself there.

• This comes as participants continue to adjust to the deluge of central bank meetings observed since Wednesday’s Sydney close (headlined by the Fed), leading to a re-assessment of RBA terminal rate expectations, which now sit close to 4.10%, still some way shy of the ~4.50% that was seen back in June, but ~20bp higher than what was seen at Wednesday’s close.
• A shunt wider in 3-Year EFP has resulted in a flattening of the 3-/10-Year EFP box, with 10-Year EFP little changed to a touch wider.