Cheaper As Post-FOMC Long-End Tsy Sell-Off Continues, BoE Held Steady

ACGBs (YM -2.0 & XM -6.0) are cheaper after the US tsy curve twist steepens, pivoting at the 5s, with yields 3bp lower to 13bp higher. Long-dated US tsy yields reached new multiyear highs after a surprising fall in initial jobless claims. Initial jobless claims unexpectedly fell by 20k to 201k, its lowest level since January.

• Elsewhere, with a 5-4 vote split the BOE left its policy rate at 5.25%, breaking a run of tightening at every meeting since the end of 2021. BOJ policy decision today.
• Cash ACGBs have opened 2-6bps cheaper, with the AU-US 10-year yield differential at -13bps.
• Swap rates are 2-6bps higher, with the 3s10s curve steeper.
• The bills strip is cheaper, with pricing -1 to -2.
• RBA-dated OIS pricing is flat to 2bps firmer across meetings.
• (AFR) Australia confirms a budget surplus in 2023, the first in 15 years. (See link)
• AFR reports that Morgan Stanley said: “Our rates strategists see the Fed overweighting strong growth over slowing inflation, much like markets have been – keeping markets exposed to weaker growth and downside growth revisions.” “We continue to see a soft landing for the economy, and remain more optimistic on the deflationary process compared to the Fed.”
• Today the local calendar sees Judo Bank PMI data.