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AUSSIE BONDS: Strong Close To the Year

AUSSIE BONDS
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ACGBs (YM +8.0 & XM +9.5) closed sharply richer on a shortened data-light session ahead of tomorrow’s New Year’s Day holiday.  

  • There has been no cash dealing in US tsys today with Japan out for a bank holiday. TYH5 is +0-05 firmer at 109-04 after Monday’s solid gains. Today’s US data (prior, est) includes FHFA House Price Index MoM (0.7%, 0.4%) and S&P CoreLogic CS 20-City MoM SA (0.18%, 0.20%) at 0900ET, Dallas Fed Services Activity (9.8, --) at 1030ET.
  • Today, the local calendar was empty. The next data releases are CoreLogic Home Value and S&P Global PMI Mfg on January 2.
  • Cash ACGBs are 8-9bps richer, and the AU-US 10-year yield differential is at -17bps, around the lowest level since June.
  • Swap rates are 7-10bps lower, with the 3s10s curve flatter.
  • The bills strip is stronger, with contracts +1 to +5.
  • RBA-dated OIS pricing is 1-5bps softer across meetings, with late 2025 leading. A 25bps rate cut is more than fully priced by April (128%), with a 63% probability of a February cut. 
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ACGBs (YM +8.0 & XM +9.5) closed sharply richer on a shortened data-light session ahead of tomorrow’s New Year’s Day holiday.  

  • There has been no cash dealing in US tsys today with Japan out for a bank holiday. TYH5 is +0-05 firmer at 109-04 after Monday’s solid gains. Today’s US data (prior, est) includes FHFA House Price Index MoM (0.7%, 0.4%) and S&P CoreLogic CS 20-City MoM SA (0.18%, 0.20%) at 0900ET, Dallas Fed Services Activity (9.8, --) at 1030ET.
  • Today, the local calendar was empty. The next data releases are CoreLogic Home Value and S&P Global PMI Mfg on January 2.
  • Cash ACGBs are 8-9bps richer, and the AU-US 10-year yield differential is at -17bps, around the lowest level since June.
  • Swap rates are 7-10bps lower, with the 3s10s curve flatter.
  • The bills strip is stronger, with contracts +1 to +5.
  • RBA-dated OIS pricing is 1-5bps softer across meetings, with late 2025 leading. A 25bps rate cut is more than fully priced by April (128%), with a 63% probability of a February cut.