Sharply Higher But Off Bests After Poor 10Y JGB Auction

ACGBs (YM +11.0 & XM +15.0) remain sharply richer but have moved off the session’s best levels in recent dealings. This recent move appears to have been primarily due to higher JGB yields, following underwhelming demand metrics observed at today's 10-year auction. US tsys have also reacted to JGBs, with yields 1bp higher to 3bps lower on the day but 1-2bp higher than earlier levels.

• There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined trade balance and home loans data.
• Cash ACGBs are 10-15bps richer, with the AU-US 10-year yield differential 4bps wider at +8bps.
• Swap rates are 10-15bps lower, with the 3s10s curve flatter.
• The bills strip has bull-flattened, with pricing +2 to +12.
• RBA-dated OIS pricing is 1-7bps softer across 2024 meetings, with Dec’24 leading.
• Tomorrow, the local calendar sees Judo Bank Australia Composite and Services PMIs, and Q3 Retail Sales Ex Inflation data.
• RBA Assistant Governor (Financial System) Jones is a panel participant at The Regulators 2023 (FINSIA) conference.
• The latest monetary policy decision from the BOE headlines in Europe. Further out, the US calendar sees US factory orders, initial jobless claims and productivity.