Richer, JOLTS & Confidence Data Fuel US Tsy Rally, CPI Monthly Due

ACGBs (YM +5.0 & XM +4.0) are stronger after weaker-than-expected consumer confidence and JOLTS data underpinned strong gains in US tsys. Short and intermediate tsys outperformed with yields dropping about 10-11 bp. The 10-year yield was down 9 bp to 4.12%.

• Cash ACGBs opened 4bp richer, with the AU-US 10-year yield differential 5bp wider at -2bp.
• Swap rates are 3-5bp lower, with the curve steeper.
• The bills strip has bull flattened, with pricing flat to +7.
• RBA-dated OIS pricing is 2-5bp softer for ’24 meetings.
• (AFR) The Reserve Bank of Australia’s proposed new dual mandate to give “equal consideration” to full employment and price stability is not intended to elevate protecting jobs at the cost of high inflation, according to one of the economists who conducted a review of the central bank. (See link)
• RBA’s Bullock says rate calls a month-by-month prospect until 2024. (See link).
• Today the local calendar sees the CPI Monthly for July. The Monthly Indicator is not a true monthly inflation measure but rather a rolling release of quarterly data. The ABS recently introduced a monthly electricity price series, but its seasonals are still unknown.
• Also on tap today are Construction Work Done (Q2), Building Approvals (Jul) and Private Sector Credit (Jul).
• Today the AOFM plans to sell A$700mn of the 2.75% 21 November 2028 bond.