Weaker, At Session Cheaps, US Jobless Claims & Fedspeak Later

ACGBs (YM -7.0 & XM -4.5) are weaker and at or near Sydney session lows. July trade balance data and a speech by outgoing RBA Governor Lowe failed to provide a market-moving domestic catalyst.

• (AFR) In his speech, Lowe said the government should hand over some of its taxing and spending powers to an independent body to reduce the reliance on the Reserve Bank in managing the economy. He added that there was a “material risk” that Australia’s living standards would stagnate without urgent action by governments to address the “political problem” of low productivity, which has fallen to its lowest level in seven years. (See link)
• Cash ACGBs are 4-6bp cheaper, with the AU-US 10-year yield differential unchanged at -12bp.
• Swap rates are 4-6bp higher.
• The bills strip has bear steepened, with pricing flat to -9.
• RBA-dated OIS pricing is mixed across meetings. Flat to 2bp firmer out to Aug’24 and 1-3bp softer beyond.
• Tomorrow the local calendar is empty tomorrow.
• Q2 (F) GDP and employment highlight in the European session, along with German July industrial production. Further out, US jobless claims will be looked for signs of a cooling in the labour market. Fedspeak includes Williams, Goolsbee, Harker, Logan and Bostic.