Richer, At Sydney Session Best Levels, US Payrolls The Focus

ACGBs (YM +4.0 & XM +2.0) are richer and sit at or near Sydney session highs. It has been a light day on the newsflow front, with the RBA’s Financial Stability Report as the highlight.

• (AFR) “A rising number of borrowers are on the brink of financial stress as higher interest payments exceed their incomes and deplete their savings, the Reserve Bank said.” (See link)
• US tsys are dealing with little change across major benchmarks in the Asia-Pac session so far. Ranges have been modest ahead of US Non-Farm Payrolls data later today. Bloomberg consensus expects +170k versus +187k prior. The unemployment rate is forecast to dip to 3.7% from 3.8% prior.
• The cash ACGB curve has bull-steepened, with yields 2-4bps lower. The AU-US 10-year yield differential is unchanged at -16bps.
• Swap rates are 4-5bps lower.
• Bills pricing is +2 to +4 across the strip.
• RBA-dated OIS pricing is 2-5bps softer across 2024 meetings.
• Next week, the local calendar sees Foreign Reserves on Monday, Westpac Consumer and NAB Business Confidence on Tuesday and CBA Household Spending on Wednesday. Also on Wednesday, RBA Assistant Governor (Financial Markets) Christopher Kent delivers a Bloomberg Address in Sydney.
• The AOFM plans to sell A$800m of 2.75% 2027 bond on Wednesday.