Cheaper, Narrow Ranges, Light Local Calendar, Jobs Report Next Thursday

ACGBs (YM -3.0 & XM -3.5) are holding cheaper after dealing in narrow ranges in today’s Sydney session. With the domestic data calendar light, local participants likely eyed US tsy dealings in today’s Asia-Pac session for directional guidance. Cash US tsys are 1-2bps richer, with a slight steepening bias.

• (AFR Joye) Equity and fixed-income investors were shocked during the week by the release of the official US inflation data, which confirmed a massive re-acceleration in services (rather than goods) inflation in March, with the annualised trend now running at an incredible 6.5 per cent (or 7.7 per cent if we exclude housing). (See link)
• Cash ACGBs are 3bps cheaper, with the AU-US 10-year yield differential 3bps lower at -28bps.
• Swap rates are 3.4bps higher, with the 3s/10s curve steeper.
• The bills strip has bear-steepened, with pricing -2 to -6.
• RBA-dated OIS pricing is 4-5bps firmer for 2025 meetings. A cumulative 17bps of easing is priced by year-end.
• The highlight of next week’s local calendar is the Employment Report for March on Thursday. The calendar is light until then.
• Next Wednesday, the AOFM plans to sell A$800mn of the 3.00% 21 November 2033 bond.