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Sigh Of Relief

AUSSIE BONDS

ACGBs follow U.S. Tsys higher on the post-Fed reprieve rally after Fed Chair Powell dubbed the expected 75bp rate hike "an unusually large one," adding that he doesn't "expect moves of this size to be common."

  • Australia's yield curve has bull steepened in early Sydney trade, with yields last seen 12.2-20.3bp lower, as the rate-sensitive 3-Year ACGB leads losses.
  • Futures contracts trade near overnight highs, with YM last +22.8 & XM +16.0 (note that the contracts have rolled and we are on U2 now).
  • Bills run 20-28 ticks higher through the reds.
  • There has been moderation in hawkish bias in RBA pricing after the Fed's announcement. The market is pricing 52bp worth of rate hike at the next Board meeting, down from 61bp at the peak yesterday.
  • Post-Fed recovery gives ACGBs some reprieve after a sharp sell-off earlier this week. Benchmark 10-Year yield made its largest gain since 1994 over the last two days, before easing off this morning.
  • There has been virtually no reaction to below-forecast GDP figures released out of New Zealand. Focus turns to Australian consumer inflation expectations & jobs market report, due within a couple of hours.
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ACGBs follow U.S. Tsys higher on the post-Fed reprieve rally after Fed Chair Powell dubbed the expected 75bp rate hike "an unusually large one," adding that he doesn't "expect moves of this size to be common."

  • Australia's yield curve has bull steepened in early Sydney trade, with yields last seen 12.2-20.3bp lower, as the rate-sensitive 3-Year ACGB leads losses.
  • Futures contracts trade near overnight highs, with YM last +22.8 & XM +16.0 (note that the contracts have rolled and we are on U2 now).
  • Bills run 20-28 ticks higher through the reds.
  • There has been moderation in hawkish bias in RBA pricing after the Fed's announcement. The market is pricing 52bp worth of rate hike at the next Board meeting, down from 61bp at the peak yesterday.
  • Post-Fed recovery gives ACGBs some reprieve after a sharp sell-off earlier this week. Benchmark 10-Year yield made its largest gain since 1994 over the last two days, before easing off this morning.
  • There has been virtually no reaction to below-forecast GDP figures released out of New Zealand. Focus turns to Australian consumer inflation expectations & jobs market report, due within a couple of hours.