Slightly Cheaper, Narrow Ranges, Consumer & Business Confidence Show Mixed Results

ACGBs (YM -2.0 & XM -1.0) are holding slightly cheaper after dealing in relatively narrow ranges in today’s Sydney session.

• Westpac Consumer Confidence jumped 6.2% to 86.0 in February to its highest since June 2022, the month following the first rate hike this cycle. Sentiment was boosted by lower-than-expected Q4 inflation reported at the end of January and the RBA being on hold again at its February meeting. Households remain depressed but are gradually feeling more positive following the trough a year ago.
• The January NAB Business Survey showed a further easing in conditions to 6 from an upwardly revised 8. This has now moved just below the series average, the first time in two years. Confidence remains around breakeven at +1 up from 0, below the historical average where it has been since Q3 2022.
• Cash ACGBs are 1bp cheaper, with the AU-US 10-year yield differential 2bps wider at flat.
• Swap rates are 1-2bps higher.
• The bills strip is slightly cheaper, with pricing flat to -2.
• RBA-dated OIS pricing is slightly mixed across meetings. A cumulative 37bps of easing is priced by year-end.