Awaiting Wages Data Tomorrow

YM & XM are both -1.0 in morning trade with U.S. Tsy futures trading softer in a narrow range on Monday. Cash Tsys were closed for the Presidents Day holiday. Cash ACGB yields are 1bp higher with the 3/10 curve unchanged at 27bp.

• Swap rates are however 4-6bp higher lead by the 3-year, resulting in wider swap spreads.
• Bills are 2-4bp softer across the strip.
• RBA-dated OIS hold yesterday’s levels with a 92% chance of a 25bp hike and terminal rate expectations pushing through the top of its recent 4.10-4.22% trading range to sit at ~ 4.25%. The cycle high for terminal rate pricing was set in Oct/Nov, just shy of ~4.50%.
• On the local docket, the preliminary Composite Judo Bank PMI for February printed at 49.2 from 48.5 in January, with Manufacturing back into expansionary territory and Services showing a reduced rate of contraction. The RBA’s Meeting Minutes are also released today but little new is expected after the post-RBA decision release of the Statement on Monetary Policy and Governor Lowe’s testimonies to parliament. Tomorrow remains the focus for the market with the all-important Q4 WPI released and the RBNZ decision slated across the Tasman.