Cheaper & At Session Lows As Local Participants Digest Hotter Than Expected US CPI

ACGBs (YM -14.0 & XM -11.5) have extended overnight weakness and are currently hovering just above the lows seen during the Sydney session. Despite a relatively light domestic calendar, today's pronounced price movement reflects the ongoing impact of yesterday's US CPI data, which exceeded expectations. This trend persists despite the slight bull-steepening observed in the US yield curve during today's Asia-Pacific session. Cash US tsys are dealing flat to 3bps richer.

• CBA’s Household Spending data rose 0.2% to 141.8 from a month earlier in March versus -0.4% prior.
• Melbourne Institute’s Expectations data showed consumers expect inflation to rise to 4.6% over the next 12 months up from 4.3% last month.
• (AAP) A plan to boost locally made resources and jobs, especially in green energy, in Australia will be unveiled by the prime minister. (See link)
• Cash ACGBs are 11-13bps cheaper, with the AU-US 10-year yield differential 5bps lower at -30bps, marking the lower end of its trading range since late 2022.
• Swap rates are 12bps higher, with EFPs tighter.
• The bills strip has bear-steepened, with pricing -3 to -17.
• RBA-dated OIS pricing is 9-11bps firmer for meetings beyond September. A cumulative 25bps of easing is priced by year-end.