Richer, Some Profit Taking Ahead Of US Payrolls, RBA Policy Decision Next Tuesday

ACGBs (YM +6.0 & XM +4.0) sit richer but at/near Sydney session lows. Ranges have been relatively narrow, but this comes after solid gains following Wednesday’s lower-than-expected Q2 core CPI data. ACGB benchmarks are 19-24bps richer than pre-CPI levels.

• After an extension of yesterday’s strong gains for cash US tsys early in today’s Asia-Pacific session, local investors opted to lock in some gains ahead of the US payrolls data release later today. Cash US tsys are currently ~1bp richer, having been as much as 2-3bps richer earlier in the session.
• Cash ACGBs are 4-5bps richer with the AU-US 10-year yield differential at +8bps.
• Swap rates are 4-6bps lower, with EFPs slightly tighter.
• The bills strip has bull-flattened, with pricing +1 to +9.
• RBA-dated OIS pricing is flat to 9bps softer across meetings, with 2025 leading. A cumulative 20bps of easing is priced by year-end.
• NSW TCorp priced an A$1.75bn increase of the 4.75% 20 February 2037 benchmark bond.
• The local calendar will see Judo Bank Composite & Services PMI data on Monday, ahead of the RBA Policy Decision, the Statement on Monetary Policy and RBA Governor Bullock’s Media Conference on Tuesday.
• Next week, the AOFM plans to sell A$800mn of the 2.75% 21 June 2035 bond on Wednesday and A$700mn of the 4.75% 21 April 2027 bond on Friday.