ACGBs (YM +2.0 & XM +3.5) are richer after a mid-session reversal in US tsys leaving them 1-7bp richer across the major benchmarks. The curve steepened. US tsys were briefly pressured as the latest round of US data continued to show a robust labour market. TYZ3 breached post-ISM lows in volatile trade. Losses were pared and tsys ticked higher for the remainder of the session, perhaps participants using the opportunity to close short positions/enter fresh longs.

• FOMC dated OIS remained stable, a terminal rate of 5.45% is seen in November with ~60bps of cuts by Jul'24. Atlanta Fed President Bostic and Dallas Fed President Logan are due to speak this morning.
• According to MNI’s technicals team, Aussie 3-year futures have pulled back after briefly touching 96.340 (Aug 9 high) on Sep 4. Nonetheless, nearby support at 95.970, the Jul 26 low, has been untroubled for now. A break of 96.340 resistance would highlight an important short-term break and signal scope for an extension to challenge resistance at 96.730.
• Cash ACGBs have opened 3bp richer with the AU-US 10-year yield differential at -12bp.
• Swap rates are 2-3bp lower.
• The bills strip has seen a slight bull flattening, with pricing flat to +3.
• RBA-dated OIS pricing is flat to 2bp softer across meetings.
• Today the local calendar is empty.