Still Cheaper But Off Cheaps, PM & Treasurer Discuss Tax Cuts

ACGBs (YM flat & XM -1.5) are cheaper but at Sydney session highs after this morning's news flow surrounding the government’s proposed changes to the already-legislated tax cuts.

• The move away from session cheaps has been aided by US tsys, which have richened slightly in today’s Asia-Pac session.
• Bloomberg reported that PM Anthony Albanese said a second consecutive budget surplus is a “possibility” in the current fiscal year as he announced changes to already-legislated tax cuts to support middle-income earners. (See link)
• (AFR) Treasurer Jim Chalmers says Reserve Bank governor Michele Bullock told the government its controversial changes to the stage three tax cut package won’t add to inflation, conceding bureaucrats worked on the redesign for weeks. (See link)
• Cash ACGBs are flat to 1bp cheaper, with the AU-US 10-year yield differential 3bps tighter at +8bps.
• Swap rates are flat to 2bps higher, with the 3s10s curve steeper.
• The bills strip bear-steepens, with pricing flat to -2.
• RBA-dated OIS pricing is little changed. A cumulative 39bps of easing is priced by year-end.