Softer Ahead Of RBA

Aussie bond futures are off worst levels but have held on to the bulk of their early losses, aided by a similar move in U.S. Tsys. Cash ACGBs are closed owing to a NSW holiday. YM is -6.5, operating a little below its overnight low, while XM is -5.0, failing to challenge its own overnight boundaries. Bills run 6 to 10 ticks cheaper through the red, bear flattening.

• Domestic data releases (final manufacturing PMI, Melbourne Institute inflation, and ANZ job advertisements) provided little by way of meaningful, lasting direction for Aussie bond futures, with participants likely sidelined due to the proximity to tomorrow’s RBA decision, as well as diminished liquidity owing to aforementioned holiday in the state of NSW.
• It would seem that the impulse from hawkish Fedspeak released over the weekend (fleshed out elsewhere) dominated matters, although soft manufacturing PMI data out of China and Sino-U.S. tensions surrounding Taiwan likely tempered the losses.
• Tuesday will see home financing data and building approvals hit the wires ahead of the RBA’s monetary policy decision. Re: the latter, STIR markets are pricing in ~48bp of tightening at present.