AUSSIE BONDS: Yield Curve Vulnerable To Rates Outlook
Nov-07 01:23
Unlike its New Zealand counterpart, which has steepened to its highest level since 2021, the ACGB yield curve remains near its flattest point since April, following the RBA’s decision this week to keep the cash rate unchanged at 3.60%.
- MNI: RBA Cash Rate Strategy Hinges On Q4 Data - Fmr Staffers. A further 1% quarter-on-quarter rise in trimmed-mean inflation in Q4 will pressure the Reserve Bank of Australia to raise its 3.6% cash rate in 2026, but geopolitical and global economic risks are likely to encourage caution, and higher unemployment could eventually prompt a return to easing later in the year, former staffers told MNI.
- Consistent with this message, the AU 3s10s yield curve appears vulnerable to any upward revision in year-ahead cash rate expectations (see chart).
Bloomberg Finance LP
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
AUSSIE BONDS: Holding Richer On A Data-Light Day
Oct-08 01:15
ACGBs (YM +1.5 & XM +3.0) are holding modestly stronger in today’s data-light session.
- Cash US tsys are flat to 1bp cheaper, with a steepening bias, in today's Asia-Pac session after yesterday's modest rally.
- Cash ACGBs are 1-3bps richer with the AU-US 10-year yield differential at +23bps.
- The latest ACGB Mar-36 auction saw strong demand, with the weighted average yield coming in 0.22bps through prevailing mid-yields, according to Yieldbroker, continuing the trend of firm pricing at recent ACGB auctions. Moreover, the cover ratio nudged higher to 3.4917x from 3.3111x.
- Bidding at today’s auction faced an outright yield that was roughly 10-15bps higher than the previous auction level and about 20bps below the late February peak.
- The bills strip is flat to +2 across contracts.
- RBA-dated OIS pricing is little changed across meetings today. A 25bp rate cut in November is given a 40% probability, with a cumulative 14bps of easing priced by year-end.
RBNZ SEES PROLONGED SPARE CAPACITY, RISK TO INFLATION
Oct-08 01:06
- RBNZ SEES PROLONGED SPARE CAPACITY, RISK TO INFLATION
RBNZ SAYS IT REMAINS OPEN TO FURTHER CUTS
Oct-08 01:04
- RBNZ SAYS IT REMAINS OPEN TO FURTHER CUTS
