At Bests, Tracking US Tsys

ACGBs sit at session bests (YM +4.0 & XM +3.0). In the absence of significant domestic news flow, the Australian market has been following the upward trend of US Tsys in the Asia-Pacific trade, which has continued to climb after making gains in the New York session. At the time of writing, US Tsy yields are 1-2bp lower. Despite a stronger-than-anticipated Japanese CPI, JGBs have remained content to follow US Tsys as they climb to overnight highs. This behaviour likely stems from the market's confidence that the data will have little impact on next week's Bank of Japan monetary policy meeting.

• Cash ACGBs are 3-4bp richer with the 3/10 curve 2bp steeper and the AU-US 10-year yield differential +2bp at -6bp.
• Swap rates are 5bp lower with EFPs unchanged.
• Bills strip is marginally flatter with pricing +2 to +4.
• RBA dated OIS pricing is flat to 3bp softer across meetings with 22bp of cumulative tightening priced by August.