Cheaper, Catching Up To US Tsys

Following the extended Easter holiday, ACGBs have opened weaker (YM -8.0 & XM -7.5) as the local market catches up with recent developments in US Tsys, including the reaction to the unexpected decline in the US unemployment rate to 3.5% from 3.6%.

• After the bell, US Tsy yields were 2-3bp higher on the day with the 2-year and 10-year yields respectively 18bp and 7bp higher than the levels coinciding with the local cash market’s close on Thursday.
• Cash ACGBs open 7-8bp cheaper with the 3/10 curve 1bp flatter and the AU/US 10-year yield differential -6bp at -17bp.
• Swap rates open 6-8bp higher with the 3s10s curve also flatter.
• Bills pricing is -5 to -11bp with the strip steeper.
• RBA dated OIS opens with pricing 3-8bp firmer for meetings beyond September with December leading.
• Westpac Consumer Confidence (Apr) and NAB Business Confidence (Mar) are slated for today. However, the highlight of the week is March Employment data on Thursday.
• Before that, on Wednesday, RBA Deputy Governor Bullock will participate in the WEAI Monetary Panel.
• Further afield, China releases March CPI/PPI data today ahead of US CPI and FOMC minutes for the March meeting on Wednesday.
• The AOFM is scheduled to sell A$100mn of the 0.25% 21 Nov 2032 Linkers.