Cheaper Into GDP

ACGBs have moved lower into today’s domestic Q1 GDP print, with less downside worry re: the release evident (we re-highlight the upward revisions made in light of yesterday’s GDP partials, with the BBG consensus now looking for a +0.7% Q/Q Q1 GDP reading). YM and XM last print 7.0 & 8.5 below their respective settlement levels. Cash ACGB trade has seen a parallel cheapening shift in the 7+-Year zone.

• The 10-Year AU/U.S. yield spread is ~5bp wider on the day, even as U.S. Tsys cheapen in early Asia trade. There has been a continued lack of notable compression demand in recent sessions when it comes to this spread, even with U.S. rates vol easing back from the recent extremes.
• Bills run unchanged to 11bp cheaper through the reds, with the late whites/early reads leading the move lower.
• 3- & 10-Year EFPS are a little over 1bp wider on the session.
• Chinese Caixin manufacturing PMI will provide some further afield interest after the national accounts readings hit (due 15 minutes after domestic Q1 GDP data).