Richer, At Sydney Session Highs But Small Ranges, RBA Minutes On Tuesday

ACGBs (YMZ3 +1.8 & XMZ3 +2.2) are dealing at or near Sydney session highs, although the range has been modest. In the absence of domestic drivers, the local market has drifted with US tsys in the Asia-Pac session. US tsys are ~1bp richer across benchmarks.

• Cash ACGBs are 2bp richer, with the AU-US 10-year yield differential 4bp lower at -18bp.
• Swap rates are 1-3bp lower, with EFPs tighter.
• The bills strip has twist flattened, with pricing -1 to +3.
• RBA-dated OIS pricing is flat across meetings.
• (AFR Joye) I was asked to tender our strongest convictions at a conference this week. The first was that we would experience the worst corporate default cycle since the global financial crisis in the US and since the 1990-91 recession in Australia. The second was that cash and liquid, high-grade bonds should outperform stocks and risky debt over the next few years. (See link)
• Next week the local calendar is empty on Monday, ahead of the RBA Minutes for the September meeting on Tuesday.
• Next Wednesday the AOFM plans to sell A$800mn of the 2.75% 21 June 2035.