Reverses Weaker Through The Session, Capex Data & US Tsys Weigh

ACGBs (YM +1.0 & XM -2.5) are mixed after giving up the initial positive reaction to the previously outlined weaker-than-expected Q3 capex data. The market possibly turned its attention to the fact that the data showed the 5^th consecutive quarter of growth and Q2 was revised up 0.6pp to 3.4%. It now stands 10.7% higher y/y. Additionally, investment expectations showed a positive outlook, with plans revised 8.5% higher for this financial year.

• Slightly cheaper cash US tsys in the Asia-Pac session has also likely weighed on the local market. Weaker than expected China PMI data failed to deliver a bid to global bonds.
• The cash 3/10 curve has twist-steepened, with yield movement bounded by +/- 2bps. The AU-US 10-year yield differential is 1bp wider at +11bps.
• The swaps curve has bear-steepened, with rates flat to 4bps higher.
• The bills strip is mixed, with pricing -2 to +2.
• RBA-dated OIS pricing is little changed across meetings.
• NSW TCorp has priced an A$1.5 billion increase to the 4.25% 20 February 2036 benchmark bond. The transaction was priced at 5.24% and a spread of 82.73bps over the ACGB 2.75% June 2035.
• Tomorrow, the local calendar sees CoreLogic House Price and Judo Bank Australia PMI Mfg data.