Richer, Light Calendar, Nov-28 Supply Well Received

ACGBs (YM +3.0 & XM +3.0) are richer and at Sydney session highs. With the domestic calendar light today, local participants have likely focused on US tsys after yesterday’s bounce back after two heavy days of selling. US tsys are ~2bps richer in today’s Asia-Pac session after finishing Tuesday 4-7bps richer across benchmarks.

• The local market's movement today is also likely to reflect the continuing digestion of yesterday’s less dovish RBA statement and possible spillover from the sharp sell-off in NZGBs following stronger-than-expected Q4 Employment and wages data.
• Cash ACGBs are 5bps richer, with the AU-US 10-year yield differential unchanged at 0bp.
• The latest round of ACGB Nov-28 supply saw the weighted average yield print 1.53bp through prevailing mids (per Yieldbroker), extending the recent trend of firm pricing at ACGB auctions. The cover ratio of 3.3687x was higher than the 3.2529x seen at the 30 August auction.
• Swap rates are 3-4bps lower.
• The bills strip has slightly bull-flattened, with pricing +1 to 5.
• RBA-dated OIS pricing has a cumulative 43bps of easing priced by year-end.