Westpac Joins 50bp In Oct Club

Modest bear flattening of the futures curve was seen in early overnight dealing on the back of Westpac’s Bill Evans joining the 50bp hike camp re: the RBA’s Oct meeting, leaving CBA as the solitary “Big 4” name calling for a 25bp step next month. U.S. Tsy moves then dominated, with the space moving back from overnight lows alongside Tsys.

• Futures trade lower in early Sydney dealing, YM -3.5 (having looked through its overnight low) & XM -2.5, with locals reacting to Evan’s call, while Bills run 3-4bp cheaper through the reds.
• Evans' RBA call change was responsible for a blip higher in RBA Oct OIS pricing in late Sydney dealing on Monday (~45bp of next tightening was briefly priced in), although some of this was pared at the Sydney re-open, perhaps on spill over from Fed speculation (outlined in our latest Tsy bullet), before payside interest came back in (last pricing 44bp of tightening for next month)
• The minutes from the latest RBA decision headline the domestic docket today, with participants on the lookout for deeper insight into RBA discussions surrounding the timing of a slower tightening pace (although this will not likely be forthcoming given Governor Lowe’s two high profile appearances in the time since).
• Elsewhere, weekly ANZ-Roy Morgan consumer confidence data is due.