Richer With US Tsys, US CPI Misses, Nov-29 Supply Due

ACGBs (YM +4.0 & XM +4.5) are richer with US tsys following a lower-than-expected US CPI print.

• Supercore (services ex-housing) inflation printed negative again, at -0.05% (-0.04% prior), vs +0.27% expected, for the first back-to-back deflations since Aug-Sep 2021. Overall core services printed just +0.13%, vs +0.32% MNI avg (and 0.22% May), the lowest since August 2021.
• Overshadowed, jobless claims data offered the first week since early May with both initial and continuing claims coming in lower than expected.
• Little pushback from the Fed: Fed Daly said Thursday that policy "adjustments" appear to be warranted at some point because the central bank's dual mandate goals are coming into better balance while saying the exact timing of a move is less important than keeping the economy on track.
• The 2-year finished 11bps lower at 4.51%, while the 10-year finished 7bps richer at 4.21% as the 4.19% resistance level stymied further gains.
• Cash ACGBs are 4-5bps richer, with the AU-US 10-year yield differential at +12bps.
• Swap rates are 4-5bps lower.
• The bills strip has bull-flattened, with pricing +2 to +6.
• RBA-dated OIS pricing is 3-6bps softer for meetings beyond August. Terminal rate expectations decline 3bps to 4.43%.
• Today, the local calendar is empty apart from the AOFM’s planned sale of A$800mn of the 2.75% 21 November 2029 bond.