Richer With Haven Flows But At Sydney Session Cheaps

ACGBs (YM +3.0 & XM +7.5) are richer but at or near Sydney session lows after dealing in a relatively narrow range.

• There hasn’t been much on the newsflow front other than the previously outlined consumer and business confidence data.
• Hence, it seems that the course of the local market has been influenced by US Tsys, which, in a chain reaction, have been affected by safe-haven flows amid the escalating conflict in the Middle East.
• US Tsy futures are holding slightly weaker in Asia-Pac dealings, but there has been little follow-through on the initial move lower. Cash US Tsys sit 12-17bps richer across the major benchmarks after yesterday's Columbus Day holiday.
• Cash ACGBs are 3-7bps richer, with the 3/10 curve flatter. The AU-US 10-year yield differential is at -19bps.
• Swap rates are 2-6bps lower, with EFPs 1-2bps wider.
• The bills strip has bull-flattened, with pricing flat to +3.
• RBA-dated OIS pricing is 1-4bps softer for ’24 meetings, with Nov’24 leading. Terminal rate expectations have softened by 2bps to 4.19%.
• Tomorrow, the local calendar sees CBA Household Spending data, along with a Bloomberg address from RBA Assistant Governor (Financial Markets) Christopher Kent.
• Tomorrow, the AOFM plans to sell A$800mn of the 2.75% 21 November 2027 bond.