At Session Bests, US Tsys Stronger in Asia-Pac

ACGBs are currently at or near session highs, 4-6bp off cheaps, as US Tsys firm (yields 2-3bp lower) in Asia-Pac trade. ACGB futures nonetheless remain weaker from midnight Thursday (YM -6.0 & XM -4.5) as the local market plays catch-up to US Tsys reaction to the unexpected decline in the US unemployment rate to 3.5% from 3.6% ahead of the Easter holiday.

• Well bid Nov-32 linker supply (cover 4.46x) appeared to support the move to session highs for ACGBs with the linker yield 2bp lower after the auction.
• On the local data front, Westpac Consumer Sentiment surged (+9.4% M/M) in April on news that the RBA paused its tightening campaign. NAB Business Confidence advanced 3bp to -1bp in March while Business Conditions eased to 16 from 17.
• Cash ACGBs are 3-5bp cheaper with the AU/US 10-year yield differential -7bp at -18bp.
• Swap rates are 3-4bp higher with the 3s10s curve 1bp flatter and EFPs slightly tighter.
• Bills strip pricing is -3 to -6 with late whites/early reds the weakest.
• RBA dated OIS is 4-5bp firmer for meetings beyond August. A 25% chance of a 25bp hike in May is priced with year-end easing expectations at 24bp versus 29bp ahead of the Easter holiday.