Richer, At Session Highs, Bullock Will Be New RBA Governor

ACGBS are sitting richer (YM +10.0 & XM +7.0), near Sydney session highs, as the local market digests the news that RBA Deputy Governor Bullock will become the new Reserve Bank governor when incumbent Philip Lowe’s term expires in September. She will become the first woman to helm the nation’s central bank. (See link)

• Outside that announcement, there has been no meaningful domestic news flow. Accordingly, local participants have likely been on US tsys watch.
• US Tsys have ticked away from session lows in Asia-Pac trade, spillover from an offer in JGBs and Fedspeak from Gov Waller weighed however the move didn't follow through. Cash tsys sit flat to 1bp cheaper across the major benchmarks, light bear flattening is apparent.
• Cash ACGBs are 7-10bp richer with the AU-US 10-year yield differential unchanged at +21bp.
• Swap rates are 7-9bp lower with the 3s10s curve steeper.
• The bill strip has bull flattened with pricing +3 to +11.
• RBA dated OIS is 4-5bp softer for meetings beyond November.
• Elsewhere, ANZ has shifted its RBA outlook. The bank now expects the central bank to be on hold for an extended period. The bank had previously seen the cash rate peak at 4.35% but now expects that at 4.10%. (See link)