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Westpac Joins 50bp In Oct Club

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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.
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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.