Richer, At Sydney Session Highs, No Data, Tracking Tsys

ACGBs (YM +7.0 & XM +7.0) are richer and trading near Sydney session highs. Without domestic drivers, local participants have eyed the performance of US tsys in Asia-Pac trade.

• Tsys have firmed off session lows in dealing in the Asia-Pac session. There has been no obvious headline driver. Cash tsys sit 1-2bp lower across the major benchmarks.
• Cash ACGBs are 7-8bp richer, with the AU-US 10-year yield differential 2bp tighter at flat.
• Swap rates are 6-7bp lower with EFPs slightly wider.
• The bills strip has bull flattened with pricing flat to +7.
• RBA-dated OIS pricing is 1-5bp softer for meetings beyond October. The market currently attaches a 5% chance of a 25bp hike in September.
• (AFR) Interest rates on Aussie and US 10-year government bonds soaring above 4.25 per cent are a game changer for every asset class and reinforce the structural shift towards a higher cost of capital that commenced in early 2022. (See link)
• Next week the local calendar is very light, with Judo Bank PMIs being the only release.
• Next Wednesday, the AOFM plans to sell A$700mn of the 3.00% 21 November 2033 bond.
• European CPI headlines later today.