Westpac's RBA Easing Call Boosts ACGBs

Aussie bonds received a boost after Westpac altered their RBA call on the back of the latest speech from RBA Dep Gov Debelle. Westpac now expect 65 Martyn Place to cut the cash rate, 3-year yield target and TFF rate to 0.10% from 0.25%, adding that Australia's central bank "is likely to extend its objectives for bond purchases to include general support for the Australian and semi government yield curves in the five to ten year maturity range". The update to Westpac's forecast came after yesterday's revision to NAB call, flagged earlier, and easily outweighed modest early pressure linked to the imminent Sep '26 Bond syndication. Aussie bond futures surged on the back of headlines from Westpac's piece; YM sits +5.0 & XM +4.0, both off their reaction highs but still well elevated. Cash ACGB yields have dipped and last sit 1.3-5.6bp lower, with the belly of the curve outperforming. 3-Year ACGB yield printed an all-time low before edging away from there. Bills running 2-3 ticks higher through the reds. RBA matters have stolen the show and improvement in local flash CBA PMIs and a 4.2% M/M decline in retail sales (preliminary reading) have been shrugged off.

• Japan has returned from its long weekend and domestic markets have absorbed news flow from the last four days. JGB futures have pushed higher and last trade at 152.21, 13 ticks above settlement. Cash JGB yields sit lower across the curve. Preliminary readings of Jibun Bank PMIs remained below the breakeven 50.0 level, showing little deviation from the August figures.
• T-Notes have wavered within a 0-03 range and last trade -0-02+ at 139-17+. Cash Tsy yields trade marginally shy of neutral levels. Eurodollars last seen +0.5 to -0.5 tick through the reds. U.S. Pres Trump disclosed that he will name his SCOTUS pick on Saturday at 5pm, while the Dems, Reps & White House struck a stopgap funding deal, which has been already cleared by the House. Domestic PMI data & a flurry of Fedspeak take focus today.