Cheaper After Relative Stability From US Tsys, Local Calendar Light

ACGBs (YM -4.0 & XM -4.5) are cheaper after US tsys finish the NY session with a slight twist-steepening of the curve after a volatile start following the largely in-line US PPI data. PPI inflation missed at 0.15% m/m (0.3% est) in March, but core measures were in line.

• Initial Jobless Claims fell 11k last week to 211k, just below expectations, but with seasonal factors around the timing of Easter still likely playing a role.
• The US 2-year finished 1bp richer, with the 10-year yield 4bps cheaper at 4.59%.
• Fed Collins and Fed Williams said it may take more time to gain the confidence to begin easing policy. Williams: “There’s no clear need to adjust monetary policy in the very near term”.
• The ECB’s in-line policy update had little lasting impact, with ECB Lagarde indicated that the Federal Reserve would not influence her, saying inflation conditions in Europe were different from the US.
• Cash ACGBs are 3-4bps cheaper, with the AU-US 10-year yield differential 5bps lower at -29bps.
• Swap rates are 3-4bps higher, with the 3s/10s curve steeper.
• The bills strip has bear-steepened, with pricing -1 to -3.
• RBA-dated OIS pricing is 2-3bps firmer for 2025 meetings. A cumulative 20bps of easing is priced by year-end.
• Today, the local calendar is empty.