Remain Richer Despite Stronger Than Expected Domestic Data Drop

ACGBs (YM +5.0 & XM +5.0) remain richer but sit slightly cheaper after November Retail Sales beat market expectations printing +2.0% m/m versus +1.2% est. November’s Building Approvals also exceeded expectations printing +1.6% m/m versus -2.0% est.

• Robert Ewing, ABS head of business statistics, said: "Black Friday sales were again a big hit this year, with retailers starting promotional periods earlier and running them for longer, compared to previous years. The strong rise suggests that consumers held back on discretionary spending in October to take advantage of discounts in November. Shoppers may have also brought forward some Christmas spending that would usually happen in December.”
• Elsewhere, cash US tsys are dealing 1-2bps richer across benchmarks in today's Asia-Pac session. The market remains focused on US CPI/PPI inflation measures on Thursday/Friday respectively.
• Cash ACGBs are 5-6bps richer on the day, with the AU-US 10-year yield differential 2bps tighter at +10bps.
• Swap rates are 4-5bps lower on the day, with EFPs slightly wider.
• The bills strip has bull-flattened, with pricing flat to +6.
• RBA-dated OIS pricing is slightly firmer after the data drop but remain 1-5bps softer for meetings beyond March.