Slight Twist Steepening Of Futures Curve, Household Spending Data Due

The ACGB futures curve (YM -1.0 & XM +2.0) has slightly twist-steepened after US Tsy futures finished slightly lower. Cash US Tsys finished dealing 11-15bps richer across the major benchmarks, with the belly leading, after trading resumed after Monday’s holiday.

• Fed Bostic reaffirmed his view that benchmark rates are high enough to get inflation under control without dragging the economy into recession, while Fed Kashkari noted he wasn’t yet convinced that the recent rise in Tsy yields would lessen the need for further rate hikes.
• Cash ACGBs are flat to 2bps richer, with the AU-US 10-year yield differential 3bps lower at -22bps.
• Swap rates are flat to 2bps lower, with the 3s10s curve flatter.
• Bills strip pricing is flat to -2.
• RBA-dated OIS pricing is 1-2bps firmer across meetings beyond November, with terminal rate expectations at 4.21%.
• (AFR) “The sharp slowdown in the rate of growth in home building costs should help counteract some of the inflationary impact of higher rents in the coming months and reduce the risk of further interest rate rises”, CoreLogic says. (See link)
• Today, the local calendar sees CBA Household Spending data, along with a Bloomberg address from RBA Assistant Governor (Financial Markets) Christopher Kent.
• The AOFM also plans to sell A$800mn of the 2.75% 21 November 2027 bond.