Free Trial

Slightly Weaker Despite CPI Monthly Miss

AUSSIE BONDS

ACGBs (YM -4.0 & XM -5.0) are slightly weaker after the release of January’s CPI Monthly. The print was better than expected at +3.4% y/y versus expectations of +3.6% and +3.4% prior.

  • (ABS) "The most significant contributors to the January annual increase were Housing (+4.6 per cent), Food and non-alcoholic beverages (+4.4 per cent), Alcohol and tobacco (+6.7 per cent) and Insurance and financial services (+8.2 per cent). Partially offsetting the annual increase is Recreation and culture (-1.7 per cent) primarily due to Holiday travel and accommodation (-7.1 per cent). "
  • “When excluding these volatile items from the monthly CPI indicator, the annual rise in January was 4.1 per cent, down from 4.2 per cent in December. "
  • “Excluding the rebates, Electricity prices would have increased 15.3 per cent in the 12 months to January 2024.”
  • Cash ACGBs are unchanged after the data but 3-5bps cheaper on the day. The AU-US 10-year yield differential is 3bp higher at -12bps.
  • Swap rates are 3-5bps higher on the day, with the 3s10s curve steeper.
  • The bills strip has bear-steepened, with pricing -1 to -5.
  • RBA-dated OIS pricing is little changed across meetings after the data. A cumulative 33bps of easing is priced by year-end.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.