Slightly Richer, Treasurer Chalmers Discusses Budget Repair

In roll-impacted trading, ACGBs (YM +1.6 & XM +2.0) are slightly richer. Without domestic data to focus on, local participants appear to have taken directional guidance from US tsy dealings in today’s Asia-Pac session. Cash US tsys are dealing flat to 2bps richer, with a flattening bias.

• Cash ACGBs are flat to 1bp richer, with the AU-US 10-year yield differential 1bp higher at -10bps.
• Swap rates are 1-2bps lower, with the 3s10s curve flatter.
• The bills strip is slightly richer, with pricing +1 to +3.
• RBA-dated OIS pricing is flat to 4bps softer across meetings, with November leading. A cumulative 48bps of easing is priced by year-end.
• (Bloomberg) -- Treasurer Jim Chalmers comments on budget in Q&A after speech at Australian Financial Review summit in Sydney. He said the government is still trying to get the budget repaired in a meaningful, ongoing way. (See link)
• (AFR) Treasurer Jim Chalmers has rejected a Coalition demand that he appoint all existing RBA board members to the new interest-rate-setting board, leaving Senate support for the government’s overhaul of the central bank in doubt. (See link)