RBA Terminal Rate Pricing Increases, ACGBs Pressured

The Aussie bond space came under pressure alongside the steepening in JGBs and as U.S. Tsys registered fresh cycle cheaps, with the major cash ACGB benchmarks running 12-15bp cheaper on the day ahead of the close, bear steepening, but operating a little above worst levels of the session. YM prints -12.0 & XM is -14.0, with the latter printing through its September lows, allowing bears to focus on the cycle lows which were printed back in June.

• The move accelerated as XM pressed through its September base.
• 3-Year yields registered fresh cycle highs on the move.
• Payside swap flows also helped, with EFPs pushing wider on the day.
• Local news flow saw Treasurer Chalmers outline the expected GDP & inflation impact from the recent floods, which will be manageable, but served as preparatory remarks ahead of the release of the Federal Budget (due next Tuesday).
• Bills run 3-25bp cheaper through the reds, with RBA terminal rate pricing extending above 4.40% in dated OIS.
• Outside of the Budget, next week will also bring the quarterly CPI data (Wednesday) and an address from RBA’s Kent (Monday). Flash PMIs (Monday), terms of trade data (Thursday) & PPI readings (Friday) will also cross.