Cheaper But Off Worst Levels, US Tsys Richer In Asia-Pac Trade

ACGBs (YM -3.0 & XM -2.0) are holding cheaper after dealing in relatively narrow ranges in today’s Sydney session. With the domestic data calendar light, the move away from the session’s worst levels appears to have been driven by US tsy dealings in today’s Asia-Pac session. Cash US tsys are 2-3bps richer, with a slight steepening bias.

• (Bloomberg) -- Bond traders are readying for 10-year US Treasury yields surpassing 5% as the scenario of no interest rate cuts by the Federal Reserve this year looks increasingly possible. (See link)
• Cash ACGBs are 2bps cheaper, with the AU-US 10-year yield differential 4bps lower at -28bps.
• Swap rates are 2-3bps higher, with the 3s/10s curve steeper.
• The bills strip has bear-steepened, with pricing flat to -4.
• RBA-dated OIS pricing is 3bps firmer for 2025 meetings. A cumulative 20bps of easing is priced by year-end.