Sharply Cheaper, Global Bonds Weigh, Employment Report Tomorrow

ACGBs (YM -11.0 & XM -11.0) are sharply lower and close to Sydney session lows. Today’s move brings the sell-off over the past 24 hours to around 15-20bps.

• The local calendar has been light today.
• Accordingly, today’s move has been a continuation of the firming of RBA tightening expectations following yesterday’s RBA Minutes.
• The push to cycle highs for US tsy and JGB yields have also impacted. So far in Asia-Pac trade today, cash US tsys are flat to 2bps richer.
• Following news that the BOJ may raise its inflation projections, the JGB curve has bear-steepened, with yields 0.9bps to 5.2bps higher.
• Cash ACGBs are 9-11bps cheaper, with the AU-US 10-year yield differential 3bps higher at -18bps.
• Swap rates are 10-11bps higher.
• The bills strip has bear-steepened, with pricing -4 to -13.
• RBA-dated OIS pricing is 4-13bps firmer for ’24 meetings.
• Tomorrow, the local calendar sees the Employment Report for September, along with the release of NAB Business Confidence.
• Bloomberg consensus has 20k new jobs with the unemployment rate stable at 3.7%.
• QTC has announced the launch of a new 5.25% 21 July 2036 bond. Initial price guidance is a range of 80-84bps over the 10-year futures contract. This transaction is expected to price tomorrow, subject to market conditions.