Slightly Richer After A Choppy Reaction To US CPI Data, Jobs Data Due

ACGBs (YM +1.0 & XM +2.5) are slightly richer after a choppy session for US tsys around the release of CPI data.

• In July, both US headline and core CPI rose by 0.2%, aligning with consensus expectations. The super core measure, which excludes housing from core services, also rose by 0.2% following a 0.5% decline in June.
• TD Securities: “The report ‘checked the box’ for the Fed to start cutting rates in September. While we expect a 25bp rate cut, the August payroll and CPI reports, high frequency claims data, and next week’s Jackson Hole Symposium will keep the market on their toes when assessing the odds of a 50bp cut.” (per AFR)
• Locally, July labour market data will print today, with Bloomberg Consensus looking for a 20k increase in employment and a stable unemployment rate of 4.1%.
• The underemployment and youth unemployment rates plus hours worked are additional indicators monitored by the RBA monitors.
• Cash ACGBs are 2bps richer, with the AU-US 10-year yield differential at +7bps.
• Swap rates are 1-2bps lower.
• The bills strip has twist-flattened, with pricing -2 to +2.
• RBA-dated OIS pricing is slightly mixed across meetings. A cumulative 23bps of easing is priced by year-end.