At Session Cheaps, Narrow Range for US Tsys

ACGBs sit at session cheaps (YM -4.0 & XM -4.0) with US Tsys little changed in a narrow range ahead of US CPI data and FOMC Minutes later today. There has been little meaningful macro news flow in today’s Asian session.

• With the local calendar light today, the highlight is likely to be RBA Deputy Governor Bullock's appearance on the WEAI Monetary Panel, which has just commenced. So far across the wires, Bullock has stated that the RBA doesn’t use rates to dial up or down financial stability and that the RBA had underestimated fiscal-monetary power during the pandemic. There hadn't been any market reaction to her comments at the time of writing.
• Cash ACGBs are 3-4bp cheaper with the curve 1bp flatter and the AU-US 10-year yield differential +1bp at -17bp.
• Swap rates are 6bp higher with EFPs 2bp wider.
• Bills strip pricing is -6 to -10 with early whites the weakest.
• RBA dated OIS pricing firms 4-8bp for meetings beyond June. A 25% chance of a 25bp hike in May is priced with year-end easing expectations at 17bp versus 29bp ahead of the Easter holiday.
• The market’s focus now shifts to the release of US CPI and FOMC Minutes later today.