RBA Set To Go Lowe-r

Aussie bonds were well bid as RBA Governor Lowe failed to play down the prospects of imminent easing, with curve flattening apparent as he alluded to the possibility of the RBA expanding its ACGB purchases to capture a more meaningful chunk of the 5-10 Year zone of the curve (an area untouched since the RBA restarted its ACGB purchases). His language re: labour market and inflation dynamics added to the idea that further easing is imminent, with most of the sell side now looking for a move in September. YM +1.5, XM +6.5, with the latter pulling back from best levels into the close.

• The latest round of Australian monthly labour market data wasn't quite as soft as feared, but still revealed chunky enough job losses, along with elevated unemployment and capacity utilisation readings. A look under the hood of the labour market data revealed a 0.1ppt uptick in the underemployment rate and a 0.2ppt uptick in the underutilisation rate, still some way shy of their respective post-COVID highs.
• Bills sit 1-2 ticks higher through the reds.
• Tomorrow will see A$1.0bn of ACGB 0.25% 21 November 2024 on offer at auction, with the AOFM set to reveal its weekly issuance schedule later in the day.