Richer After RBA Minutes But Off Best Levels

ACGBs are currently sitting in the middle of the Sydney session’s range (YM flat & XM -5.0) after the initial favourable response to the release of the June RBA Minutes faded. Currently, 3-year and 10-year futures are 6bp and 3bp firmer post-Minutes after being as much as +11bp and +7.5bp at one stage.

• Despite the RBA minutes not showing explicit dovishness, market sentiment appears to have been influenced by subtle changes in wording regarding the necessity of additional tightening, along with the finely balanced decision on whether to raise interest rates or maintain the status quo. The surge in pricing can also be attributed to an oversold condition for futures prior to the release.
• RBA Deputy Governor Bullock has just addressed the AIG in Newcastle. Her speech was focused on recent labour market developments.
• The 3/10 cash curve has twist steepened with pricing 1bp richer to +5bp cheaper.
• Swaps are flat to 5bp higher on the day.
• Bills strip steepens with pricing -1 to +3.
• RBA dated OIS pricing is 2-5bp softer across meetings with November leading.
• The local calendar is light tomorrow with Westpac-MI Leading Index as the highlight.
• The AOFM plans to sell A$700mn of the 3.50% 21 December 2034 bond tomorrow.