RBA Chatter Supports ACGBs, Core FI Bid Despite Firmer Equities

An update to Westpac's RBA call briefly put a bid in Aussie bonds, which spilled over into the broader core FI space. Westpac now expect the RBA to extend their QE programme by a further A$100bn (prev. forecast: A$50bn) in mid-Oct. YM trades -1.0, with XM last seen +2.0, after popping higher in reaction to Westpac's piece. The 10-20 Year sector outperforms in cash space, with yields sitting a touch lower across the curve. Bills trade unch. to -1 tick through the reds. Today's ACGB 0.25% 21 Nov '24 sale was smoothly digested. The A$800mn offering was unusually small by historical standards. It saw a tighter price tail vs. the previous auction & a slightly smaller bid/to cover ratio, which nonetheless held above 4.00x. The AOFM released a relatively light issuance slate for next week. Across the Tasman, the RBNZ trimmed its LSAP purchase target for next week, which was expected after NZ Tsy said it will reduce bond issuance in Apr.

• T-Notes popped higher in sync with Aussie bonds but have eased off highs and last sit -0-03 at 132-01+, with e-minis hovering in positive territory. Cash Tsy yields sit lower across the curve, with the 5-7 Year sector outperforming despite a rather disappointing 7-Year Note auction yesterday. Eurodollar futures trade unch. to +0.5 tick through the reds. Focus in the U.S. turns to personal income/spending & PCE data.
• JGB futures re-opened on a softer footing but have rallied from there, topping out at 151.41. The contract posted an uptick to session highs as the BoJ left the sizes of its 1-3 & 5-10 Year JGB purchases unch. At typing, JGB futures trade at 151.39, 5 ticks above last settlement. Cash JGB yields sit a touch lower across the curve, with 2s outperforming. Core Tokyo CPI printed at -0.1% Y/Y in Mar, marginally above exp. of -0.2% & improving vs. the -0.3% seen in Feb.