AUSSIE BONDS: Cheaper On A Subdued Pre-US Payrolls Friday
Jan-10 03:45
ACGBs (YM -3.0 & XM -4.0) are cheaper and hovering near Sydney session lows on a subdued pre-US payroll Friday.
- Outside of the previously outlined household spending, there hasn't been much by way of domestic drivers to flag.
- Cash US tsys are slightly richer in today’s Asia-Pac session after yesterday’s modest gains. Nonfarm payrolls growth is seen at circa 160k in December as some recent distortions from hurricanes and strikes are in the rear-view mirror.
- Cash ACGBs are 2-4bps cheaper with the AU-US 10-year yield differential at -16bps.
- Swap rates are flat to 1bp higher.
- The bills strip is -1 across contracts.
- RBA-dated OIS pricing is flat to 2bps firmer across meetings today. A 25bp rate cut is more than fully priced for April (118%), with the probability of a February cut at 75% (based on an effective cash rate of 4.34%).
- Monday, the local calendar will see Melbourne Institute Inflation and ANZ-Indeed Job Advertisements data.
- AOFM Bond issuance will resume next week, with A$800mn of the 3.50% 21 December 2034 bond to be sold on Wednesday and A$700mn of the 2.75% 21 November 2027 bond on Friday.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
OIL: Crude Higher; EIA Data, OPEC Report & US CPI Released Later
Dec-11 03:40
Oil prices are higher ahead of US data. They have been buoyed by news that the Biden administration is considering stricter sanctions on Russia’s oil exports before Trump takes office in January, which if enforced could reduce global supply. Brent is up 0.6% to $72.63/bbl, close to the intraday high, while WTI is also 0.6% higher around $69.00. The USD index is off its low but still down 0.1%.
- Crude has been range trading in recent weeks due to offsetting factors, including increased tensions in the Middle East and a pessimistic supply/demand outlook for 2025. The market continues to monitor data and policy developments in China.
- The EIA forecast a small crude deficit of around 100kbd in 2025 in its latest outlook. The shift from a surplus was driven by OPEC’s decision to delay its output normalisation to the start of April. OPEC’s monthly report is released today and the IEA’s, which tends to be less optimistic, is on Thursday.
- Bloomberg reported that US crude oil inventories rose 0.499mn last week after falling 1.23mn the week before, according to people familiar with the API data. Gasoline stocks rose 2.85mn and distillate +2.5mn. The official EIA data are out later today.
- November US CPI data is out later, which is expected to show headline ticking up to 2.7% y/y but core steady at 3.3% y/y. The Fed is currently forecast to cut rates 25bp on December 18. US November real earnings and federal budget balance are also out and the Bank of Canada decision is announced.
EQUITIES: Asian Equities Mixed As Market Remains Cautious Ahead Of US CPI
Dec-11 03:22
AUSSIE BONDS: Cheaper On the Day But Still Richer Than Pre-RBA Levels
Dec-11 02:48
In roll-impacted dealings, ACGBs (YM -2.4 & XM -5.2) are cheaper on a data-light Sydney session. Andrew Hauser, RBA Deputy Governor, will give a speech at the ABE Annual Dinner aftermarket.
- Cash US tsys are ~1bp cheaper in today’s Asia-Pac session ahead of US CPI data later today.
- Cash ACGBs are 2-5bps cheaper on the day but remain 3-8bps richer than yesterday’s pre-RBA levels. While the RBA left the cash rate unchanged it issued softer guidance, which has bolstered sentiment.
- The AU-US 10-year yield differential is at -4bps, around its lowest since July.
- Swap rates are flat to 4bps higher, with the 3s10s curve steeper.
- The bills strip is little changed, with pricing flat to -2.
- RBA-dated OIS pricing is largely unchanged today but remains 3–11bps softer than pre-RBA levels observed yesterday. A 25bp rate cut is now more than fully priced for April, with market expectations at 113%.
- Expectations for the September meeting have softened by 50bps since mid-November, reflecting concerns about weakening domestic economic growth.
- The probability of a cut at yesterday’s meeting was low, at just 8%. However, the market now assigns a 60% chance to a 25bp cut at February’s meeting.
