Twist Flattening Of the Curve Remains, Household Spending Holds Up

The ACGB futures curve (YM -2.0 & XM +3.0) has twist-flattened further in Sydney’s afternoon.

• CBA’s household spending insights (HSI) for September showed that consumption is holding up in value terms with Q3 seeing stronger growth than Q2 as consumers continue to spend savings and labour income remains robust. However, the HSI suggests that spending volumes are still contracting. It has a very high correlation with the ABS retail sales data and suggests a small rise for September.
• The RBA Assistant Governor Kent spoke today on the “Channels of Transmission”. His comments on the central bank’s monetary stance were consistent with the latest meeting statement including that “some further tightening” may be needed and the RBA remains very data-dependent.
• Cash ACGBs are 2bps cheaper to 3bps richer, with the AU-US 10-year yield differential 3bps lower at -21bps.
• Swap rates are flat to 5bps lower, with the 3s10s curve flatter.
• Bills strip pricing is flat to -2.
• RBA-dated OIS pricing is little changed across meetings.
• (AFR) Australians devote a greater share of their income to mortgage repayments than any other advanced economy, the IMF has revealed, as it downgraded its forecasts for the local economy and warned inflation will be higher than previously thought. (See link)
• Tomorrow, the local calendar sees Consumer Inflation Expectations data.