Bid Extends, Labour Market Data Due

The read through from a rally in U.S. Tsys linked to softer than expected U.S economic data has allowed ACGBs to build on their post-BoJ bid, leaving YM +6.0 & XM +11.5, with futures dealing off their overnight peak. Cash ACGBs sit 6.0-11.5bp richer across the curve, with the 10- to 12-Year zone leading.

• Bills run 2-6bp richer through the reds, with the strip bull flattening a little.
• RBA dated OIS shows 19bp of tightening, 1bp or so lower vs. yesterday’s late Sydney levels, while terminal OCR has come in a touch in lieu of the U.S. data, printing between 3.65-3.70%.
• There hasn’t been much in the way of meaningful domestic news flow to digest.
• As noted in our previous bullet, the labour market report for December headlines today’s local docket and is expected to show that conditions remain very tight. We will also see the latest round of consumer inflation expectations data.