Cheaper But Off Worst Levels, BOJ Policy Decision Due

ACGBs (YM -2.0 & XM -5.0) are holding in negative territory but above the Sydney session’s morning lows. With the domestic calendar light (Judo Bank preliminary PMIs only data released), local participants have been on headlines and US tsys watch.

• After pushing to multiyear highs on Thursday, long-dated US tsys are dealing ~1bp cheaper in Asia-Pac trade. Ranges have been narrow.
• The highlight of today's Asian session is the BOJ Policy Decision. Our analysis aligns with the prevailing consensus that is anticipating that the BOJ will maintain its existing policies in today's announcement, including the short-term interest rate remaining at -0.1%. (See MNI’s BOJ Preview here)
• Cash ACGBs are 1-5bps cheaper, with the AU-US 10-year yield differential 2bp lower at -15bps.
• The 3s10s swap curve has twist-steepened, with rates 1bp lower to 4bps higher. EFPs are tighter.
• The bills strip is richer, with pricing flat to +2
• RBA-dated OIS pricing is flat to 3bps softer across meetings, with Jun’24 leading.
• (AFR) Bullock’s power hinges on RBA appointments. “I don’t think the governor loses power,” Dr Parkinson said. “Because the governor has to win by influencing and think about their messaging with the board, in the same way, they have to think about their messaging with the public.” (See link)