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AUSSIE BONDS: Subdued Session Ahead Of Xmas Break, No Reaction To RBA Minutes

AUSSIE BONDS
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ACGBs (YM flat & XM -3.5) closed cheaper but off worst levels on a holiday-shortened session.

  • Australia’s central bank is more confident that inflation is moving sustainably toward target but it’s still too soon to conclude the battle is won given a recent pick-up in consumption and a still-tight labour market, minutes of the December meeting showed.
  • The Reserve Bank’s board discussed scenarios in which future policy would be eased to boost economic growth or stay at current restrictive levels, according to minutes of the Dec. 9-10 meeting. The board concluded either outcome was conceivable and opted to stand pat at 4.35%, saying recent data hadn’t been sufficient to shift the dial on the policy outlook. (see BBG link)
  • Cash ACGBs closed 1-4bps cheaper with the 3/10 curve steeper and the AU-US 10-year yield differential at -14bps.
  • The bills strip closed slightly richer with pricing +2 to +3 across contracts.
  • RBA-dated OIS pricing closed showing a 25bps rate cut more than fully priced by April (123%). A 59% chance is priced for February.
  • The local market will resume on the 27th of December after the extended Xmas break.
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ACGBs (YM flat & XM -3.5) closed cheaper but off worst levels on a holiday-shortened session.

  • Australia’s central bank is more confident that inflation is moving sustainably toward target but it’s still too soon to conclude the battle is won given a recent pick-up in consumption and a still-tight labour market, minutes of the December meeting showed.
  • The Reserve Bank’s board discussed scenarios in which future policy would be eased to boost economic growth or stay at current restrictive levels, according to minutes of the Dec. 9-10 meeting. The board concluded either outcome was conceivable and opted to stand pat at 4.35%, saying recent data hadn’t been sufficient to shift the dial on the policy outlook. (see BBG link)
  • Cash ACGBs closed 1-4bps cheaper with the 3/10 curve steeper and the AU-US 10-year yield differential at -14bps.
  • The bills strip closed slightly richer with pricing +2 to +3 across contracts.
  • RBA-dated OIS pricing closed showing a 25bps rate cut more than fully priced by April (123%). A 59% chance is priced for February.
  • The local market will resume on the 27th of December after the extended Xmas break.