Richer, Mid-Range, Awaiting US PCE Deflator Data

ACGBs (YM +3.0 & XM +3.5) are richer but sit in the middle of today’s Sydney session ranges. Today’s mixed domestic drop (Retail Sales weaker, Capex Stronger and Private Sector Credit in line with expectations) failed to meaningfully move the market. At the time of writing, ACGB futures were 1-2bps weaker than pre-data levels.

• The Australian economy is facing a significant slowdown but will likely avoid a recession, Treasurer Jim Chalmers said on Thursday. Speaking from the G20 Finance Ministers and Central Bank Governors meetings in Brazil, he told the ABC that while inflation is falling in Australia, the country is "not immune" to weak global growth. (See link)
• Cash tsys are ~1bp richer in today's Asia-Pac session ahead of US PCE Deflator data later today.
• Cash ACGBs are 3-4bps richer, with the AU-US 10-year yield differential flat at -14bps.
• Swap rates are 3-4bps lower.
• The bills strip has bull-flattened further, with pricing flat to +4.
• RBA-dated OIS pricing is flat to 1bp softer across meetings. A cumulative 36bps of easing is priced by year-end.
• Tomorrow, the local calendar sees CoreLogic House Prices and Judo Bank PMI Mfg data.
• Tomorrow, the AOFM plans to sell A$800 million of 3.75% May-34 bond.