Supply Dynamics & RBA Speak Eyed

ACGBs corrected from worst levels in the latter rounds of Sydney trade, with spill over from a bid in U.S. Tsys helping after the impulse from a heavier impending weekly AOFM issuance slate (which includes ACGB Mar-47 supply) and weakness in JGBs applied pressure during the first half of the Sydney session. That left YM -2.0 & XM -3.0 at the bell with cash ACGBS running 2.5-3.5bp cheaper across the curve.

• Bills were flat to -3 through the reds, with light bear steepening in play. RBA dated OIS continue to price just over 20bp of tightening for next month’s RBA decision, with terminal cash rate pricing hovering around the 3.90% mark, as both measures operate within their recent ranges.
• Looking ahead, RBA Governor Lowe’s latest appearance in Canberra headlines Monday’s domestic docket, with retail sales data and the aforementioned round of ACGGB Mar-47 supply also slated.
• Next week’s domestic docket also includes monthly CPI data, building approvals, private sector credit, CoreLogic house price readings, housing finance data and the first round of Q3 GDP partials, which comes in the from of the capex print. Note that we will also hear from RBA’s Kearns, Head of the Bank’s domestic markets division, during the course of the week, via an appearance in front of the Australian Securitisation Conference.