Reversing Earlier Cheaps On German NRW CPI Beat

Aussie bonds reversed losses observed after the release of firmer than expected Australian retail sales data, with core FI markets catching a bid on the release of German NRW CPI data, pointing to easing inflation in Germany’s most populous state (details on data release fleshed out earlier).

• YM and XM are +4.5 and +1.0 respectively, operating around session highs and a little below Tuesday’s best levels, while bills run 1-2 ticks firmer through the reds. Cash ACGBs have bull steepened, running 1.0bp to 5.0bp richer across the curve, with the release of NRW CPI data unwinding the bear steepening seen just prior, with yields running flat to 5.0bp higher then.
• STIR markets are continuing to price in ~45bp of tightening for the RBA’s July meeting, little changed on the week, with a cumulative ~244bp priced in for calendar ‘22 (up from ~240bp at the beginning of the week).
• The local data docket sees May job vacancies and private sector credit due (0230 BST) on Thursday, with A$1.0bn of the 9 Sep ‘21 and A$1.5bn of the 7 Oct ‘22 Treasury Notes on tap.