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Slightly Richer Ahead Of US NFP, RBA Policy Decision On Tuesday


ACGBs (YM +2.0 & XM +3.5) sit in the middle of the Sydney session ahead of US Non-Farm Payrolls data later today. There hasn't been much in the way of potential domestic drivers today outside the housing finance miss.

  • Local participants have likely been on headlines and US tsys watch. US tsys are near Asia-Pac lows, flat to 1bp cheaper.
  • Cash ACGBs are 3bp richer, with the AU-US 10-year yield differential 4bp lower at -11bp.
  • Swap rates are 3bp lower.
  • The bills strip has slightly bull-flattened, with pricing flat to +3.
  • RBA-dated OIS pricing is flat to 3bp softer across meetings out to May’24.
  • Next week the local calendar sees the MI Inflation Gauge (Aug), Inventories (Q2), Company Profits (Q2) and ANZ-Indeed Job Ads (Aug) on Monday, ahead of Judo Bank PMIs (Aug F), Balance of Payments (Q2) and Net Exports (Q2) on Tuesday and GDP (Q2) on Wednesday.
  • The RBA policy decision is on Tuesday, with consensus unanimous in expecting the cash rate to be left unchanged at 4.10% for the third consecutive month. A 3% chance of a 25bp hike is currently priced for next week’s meeting.
  • The AOFM plans to sell A$700mn of the 3.50% Dec-34 bond on Wednesday.

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