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Cheaper But Little Changed After PPI Data, Year-End Easing Expectations Pared

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ACGBs (YM -9.0 & XM -8.5) are holding cheaper but little changed after Q1 PPI data prints +0.9% q/q and 4.3% y/y versus +0.9% and +4.1% y/y prior. Export prices fell 2.1% q/q (estimate -0.6%) in Q1 versus +5.6% in Q4. Import prices fell 1.8% q/q (estimate +0.1%) versus +1.1% in Q4.

  • Cash US tsys flat to 1bp richer in today’s Asia-Pac session after yesterday’s post-GDP cheapening. Today’s US data calendar will see Personal Income/Spending and UofM Sentiment.
  • Cash ACGBs are 11-12bps cheaper, with the AU-US 10-year yield differential 5bps higher than Wednesday's close at -17bps.
  • Swap rates are 12-13bps higher.
  • The bills strip has bear-steepened, with pricing -4 to -11.
  • RBA-dated OIS pricing is 6-15bps firmer than Wednesday’s closing levels for meetings beyond June. A cumulative 4bps of easing is priced by year-end as the December meeting shunts 28bps firmer versus pre-CPI levels.
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ACGBs (YM -9.0 & XM -8.5) are holding cheaper but little changed after Q1 PPI data prints +0.9% q/q and 4.3% y/y versus +0.9% and +4.1% y/y prior. Export prices fell 2.1% q/q (estimate -0.6%) in Q1 versus +5.6% in Q4. Import prices fell 1.8% q/q (estimate +0.1%) versus +1.1% in Q4.

  • Cash US tsys flat to 1bp richer in today’s Asia-Pac session after yesterday’s post-GDP cheapening. Today’s US data calendar will see Personal Income/Spending and UofM Sentiment.
  • Cash ACGBs are 11-12bps cheaper, with the AU-US 10-year yield differential 5bps higher than Wednesday's close at -17bps.
  • Swap rates are 12-13bps higher.
  • The bills strip has bear-steepened, with pricing -4 to -11.
  • RBA-dated OIS pricing is 6-15bps firmer than Wednesday’s closing levels for meetings beyond June. A cumulative 4bps of easing is priced by year-end as the December meeting shunts 28bps firmer versus pre-CPI levels.