A Heavy Global Calendar Next Week With RBA Decision The Local Highlight

ACGBs move away from overnight lows to close near session highs (YM -3.0 & XM -4.0) with U.S Tsys lightly richening in Asia-Pac trade. The AU/U.S. 10-Year yield differential treads water at -16bp.

• Bills strip twist steepens with the whites out to Sep-23 +2bp and up to 6bp of cheapening seen beyond there.
• Ahead of the RBA’s rates decision on Tuesday, RBA-dated OIS is pricing a 92% chance of a 25bp hike. More broadly, strip pricing was mixed with meetings through October flat to -2bp, but November and December respectively +1 and +3bp firmer, as the market prices out any chance of an easing this year.
• The RBA rates decision (Tues) and RBA Governor Lowe’s AFR Summit speech (Wed) are the local highlights next week with the market keen for an update after last month’s hawkish shift. In the February decision statement, the RBA signalled multiple hikes by removing the ‘not on a pre-set course’. With Q4 WPI and January monthly CPI both surprising on the downside since then, the market will be watching to see if the RBA stays on the pre-set course of “further increases in interest rates will be needed”.
• Elsewhere, the global calendar is busy with the highlights: Fed Chair Powell’s semi-annual Monetary Policy Reports to Congress (Tue & Wed), BoC's decision (Wed), China’s CPI (Thu) and U.S. Payrolls (Fri).