AUSSIE BONDS: Slightly Cheaper, MYEFO Out, Little Reaction
Dec-17 01:43
ACGBs (YM -2.0 & XM -1.0) are little changed on a data-light day.
- Today’s auction result for the Oct-36 bond extended the recent trend of firm pricing for ACGBs, with the weighted average yield printing 0.33bps through prevailing mids. Moreover, demand was robust, as reflected by a cover ratio of 3.7100x.
- Cash US tsys are slightly cheaper in today’s Asia-Pac session.
- Australia’s mid-year budget update shows the government continuing to run sizeable deficits over the forecast period, despite tighter spending controls and expectations of stronger revenue from an economic recovery. The underlying cash deficit is projected at A$36.8 billion, or 1.3% of GDP, in the year to June 2026, with deficits narrowing only gradually to around 1.1% of GDP per year by fiscal 2029. The government highlighted A$20 billion in savings identified in the MYEFO and said it will constrain average real spending growth to 1.7% over the seven years to 2028–29, well below the 30-year average of 3.3%.
- Cash ACGBs are 1-2bps richer with the AU-US 10-year yield differential at +58bps.
- The bills strip pricing is -1 to -3 across contracts.
- RBA-dated OIS pricing shows tightening across all meetings, with the probability of a 25bp hike rising from 40% for February to 100% by June and 160% by December 2026.
- Tomorrow, the local calendar will see Consumer Inflation Expectation.
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US TSYS: Cash Bonds Slightly Mixed As US Data Releases Come Into Focus
Nov-17 01:22
TYZ5 is trading at 112-18, +0-01 from closing levels in today's Asia-Pac session.
- Cash US tsys are 1bp richer to 1bp cheaper, with a steepening bias, in today's Asia-Pac session. On Friday, US tsys finished showing a modest bear-steeper, with benchmark yields 1-4bps higher.
- US equity futures are slightly firmer in today’s Asia session. The S&P looked to be rolling over again on Friday night, down almost 1.5% before it found solid demand during the N/Y session and pared back all the day's losses. The market will be looking toward the release of some US data this week to get a gauge on things and also heavily focused on the upcoming Nvidia results which will heavily impact the direction of markets this week.
- Some postponed data is starting to come into view, with the BLS scheduling September's delayed nonfarm payrolls report for next Thursday, and the Census Bureau set to publish some delayed August data next week. Still, there's no official word on the fate of the October CPI release, which looks very likely to be cancelled altogether.
MNI: CHINA PBOC CONDUCTS CNY283 BLN VIA 7-DAY REVERSE REPO MON
Nov-17 01:22
- CHINA PBOC CONDUCTS CNY283 BLN VIA 7-DAY REVERSE REPO MON
CNH: USD/CNY Fixing Makes Another Low, USD/CNH Steady Amid Broader USD Gains
Nov-17 01:19
The USD/CNY fix made another fresh low at 7.0816, against a BBG market consensus of 7.0976. The fixing error was little changed a t-160pips (-164pips on Friday). At face value this should support yuan sentiment, although broader USD trends are firmer so far in Monday trade (higher beta FX is underperforming). USD/CNH is little changed so far today, holding near 7.1000. Note the 20-day EMA is around 7.1165, the 50-day at 7.1275. Recent lows have come in near 7.0900, which we couldn't breach on multiple occasions late last week.
