MNI China Daily Summary: Wednesday, December 11

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CORRECTED-MNI BRIEF: Brazil Inflation Rises To 4.87% In Nov

MNI: US NOV CPI 0.3%, CORE 0.3%; CPI Y/Y 2.7%, CORE Y/Y 3.3%

MNI: US NOV SUPERCORE CPI (CORE SERVICES EX-HOUSING) 0.342%

MNI: US NOV CPI UNROUNDED M/M 0.313%, CORE 0.308%

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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Slightly Cheaper After The RBA’s Policy Decision

AUSSIE BONDS

ACGBs (YM -3.4 & XM -3.9) sit a little cheaper and at session cheaps after the RBA Policy Decision. The last two paragraphs of the RBA statement were little changed from the last meeting. To summarise:

  • The RBA Board prioritises returning inflation to target, aligning with its mandate for stability and full employment. While inflation has eased slowly, it remains high. The Board remains vigilant to risks, relying on data to guide interest rate decisions, and will closely monitor economic developments.
  • Cash ACGBs are slightly cheaper after the decision, with yields 3bps higher on the day. The AU-US 10-year yield differential is at -13bps after being at -15bps earlier in the day.
  • Swap rates are 1-2bps higher after the decision.
  • The bills strip has shifted cheaper, with pricing -2 to -5.
  • RBA-dated OIS pricing is flat to 2bps firmer across meetings after the decision. Currently, the market is pricing approximately 13bps of easing by year-end from an anticipated terminal rate of 4.34%. In the run-up to the RBA’s May Policy meeting, the market was pricing no easing by year-end from an anticipated terminal rate of 4.42%.
  • Tomorrow, the local calendar is empty part from the AOFM's planned sale of A$800mn of the 2.75% Jun-35 bond.
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