Steeper, But Sources Of Support May Have Limited Long End Losses

Aussie bonds have looked through ACGB supply matters and an in line with exp. local private sector credit release, with focus well and truly on next week's headline risk events, namely the RBA decision and U.S. election. Curve was steeper vs. settlement come the close, YM unch., XM -1.5, with the cash space twist steepening. Swaps were wider vs. ACGBs. Larger than usual ACGB month-end extensions & the proximity to the RBA decision may have cushioned the long end, promoting some outperformance vs. Tsys since yesterday's Sydney close.

• On next week's RBA decision, a recent AFR article has suggested that the cash rate target will be cut to 0.10%, alongside the 3-Year ACGB yield target and interest rate applied to the TFF being trimmed to the same level. The piece also suggested that the interest paid on E/S surplus funds lodged at the RBA will fall to 0.01%. Finally, the piece noted that the Bank will buy "billions of dollars of longer-dated Commonwealth and state government bonds with tenors of between five and 10 years." The piece also played down the idea of the Bank adopting a 5-Year ACGB yield target.
• Bills unchanged at settlement, with a seller of the IRZ0/M1 spread seen early in Sydney.
• M'fing PMIs, CoreLogic house price data and A$1.5bn of ACGB 0.25% 21 November 2025 headline locally on Monday.