A Touch Cheaper To Start, RBA Risk Eyed

The spill over from wider global core FI market weakness, alongside a rally in crude oil prices, applied pressure to Aussie bond futures in the overnight session, although the space recovered from lows as U.S. equities moved into negative territory during the NY afternoon (see earlier bullets for a little more colour on that). That leaves YM –5.5 & XM -7.0 shortly after the Sydney re-open, a little below late overnight levels, with the light pressure in early Sydney trade likely a product of the previously flagged hawkish adjustment to ANZ’s view on the RBA (they now expect 4x 50bp hikes in Aug through Nov). Bills run 3-8bp lower through the reds, bear steepening.

• The minutes from the latest RBA decision are due to be released today, with participants on the lookout for any sign of discussions surrounding a larger than (the implemented) 50bp hike at this month’s meeting/trigger points for such a move as we go forwards. Elsewhere, Deputy Governor Bullock will speak on “How are Households Placed for Interest Rate Increases?” Once again, her address will be eyed for any clues when it comes to the trajectory of future tightening and reaction to the most recent data releases (most notably last week’s strong labour market report). A quick reminder that RBA Governor Lowe is set to speak on Wednesday, on the topic of “Inflation, Productivity and the Future of Money.”