Bid After Soft CPI

Aussie bonds firmed, paring all of their overnight/early Sydney losses in the wake of the softer than expected local Q1 CPI data. YM +2.0, XM +1.0 at typing. The ACGB Apr '24/Nov '24 yield spread has flattened by 3.5bp today and sits 6bp shy of its intraday steeps. The softer than expected Q1 CPI reading has also been the driving factor here. A reminder that this spread is often used to gauge market pricing of the chances of the RBA extending its 3-Year yield targeting measure to ACGB Nov '24 from ACGB Apr '24. Elsewhere, ~30K of IRM1 traded in the wake of the CPI print, at one price, with ~20K lifted and ~10K given. The IR strip runs unchanged to +2 through the reds.

• The latest round of ABS payrolls data revealed that jobs fell by 1.8% in the fortnight to 10 April. The ABS noted that "the latest fortnight included the Easter holiday period which regularly sees a seasonal fall in a range of labour market indicators, especially hours worked. These seasonal factors make it difficult to gauge any effect of the end of the JobKeeper wage subsidy on 28 March. The next fortnight of data (available on 11 May) should provide a better sense of the state of the labour market after JobKeeper. Comparisons with the same fortnight a year ago are also difficult, as nationwide pandemic restrictions were in place."
• Terms of trade data headlines the local docket on Thursday.