Sharply Cheaper, Global Bond Yields Higher As Higher-For-Longer Message Weighs

ACGBs (YM -6.0 & XM -10.5) are sharply weaker. A newsflow light NY session didn’t stop yields from pushing to fresh cycle highs as global bond markets continued to smart from last week’s higher-for-longer message from the Fed. US tsys finished 2-12bps cheaper across benchmarks. The 2s10s curve was 8bps steeper and at its steepest level in four months.

• There was little reaction to the latest round of US data as the Chicago Fed Act. Index and Dallas Fed Mfg Activity Index were both weaker than forecast.
• Chicago Fed President Goolsbee said US rates were at their peak and the debate would soon shift to how long they'll hold there.
• Cash ACGBs have opened 5-10bps cheaper, with the AU-US 10-year yield differential at -12bps.
• Swap rates are 3-9bps higher, with the 3s10s curve steeper.
• The bills strip has bear-steepened, with pricing -1 to -7.
• RBA-dated OIS pricing is flat to 2bps firmer across meetings.
• Today the local calendar is empty, ahead of the CPI Monthly for August tomorrow. The Monthly CPI lifted 0.3% in July to be 4.9% y/y, a moderation from the 5.4% in June and the recent peak of 8.4% in December. Petrol prices rose close to 8% in August while diesel is up more than 12% so auto fuel will be a meaningful factor.