Aussie bonds knee-jerked lower as local Q1 CPI report revealed that price pressures were more acute than anticipated. Headline inflation reached +5.1% Y/Y, beating consensus forecast of +4.6% and reaching the fastest pace since 2001. The key gauge of underlying inflation breached the RBA's target range and printed at +3.7% Y/Y, topping BBG median estimate of +3.4%.
- YM holds the bulk of post-CPI losses and last trades +1.0, with XM already off reaction lows and trading +5.0. Bills last seen -9 to +12 ticks through the reds. Cash ACGBs have eased off reaction highs, with yields last sitting up to 5.8bp lower across a flattened curve.