Richer But Little Changed After The Release Of In-Line Q4 GDP Data

ACGBs (YM +3.0 & XM +5.0) are richer but little changed after Q4 GDP printed in line with expectations.

• GDP rose 0.2% q/q (estimate +0.2%) in 4Q versus revised +0.3% in 3Q, according to the ABS. GDP rose 1.5% y/y (estimate +1.5%) versus +2.1% in 3Q.
• Katherine Keenan, ABS head of national accounts, said: “Growth was steady in December, but slowed across each quarter in 2023.” “Government spending and private business investment were the main drivers of GDP growth this quarter,” she said.
• (Bloomberg) -- Australia’s economy slowed in the final three months of last year as elevated interest rates and rising living costs dragged on household spending. (See link)
• Cash ACGBs are 4-6bps richer on the day, with the AU-US 10-year yield differential flat at -12bps.
• Swap rates are 3-5bps lower, with the 3s10s curve flatter.
• The bills strip has bull-flattened, with pricing flat to +5.
• RBA-dated OIS pricing is little changed after the data to be flat to 4bps softer on the day across meetings. A cumulative 42bps of easing is priced by year-end.