Cheaper, Narrow Ranges, No Cash Trading For US Tsys

ACGBs (YM -6.0 & XM -3.0) are holding cheaper after dealing in relatively narrow ranges in today’s Sydney session. With the domestic calendar light, local participants are likely on headlines and US tsys watch. However, the lead-in from Friday’s NY session was minimal and today’s news flow has been light. US tsy futures are dealing slightly stronger, with cash bonds not trading in the Asia session due to a Japanese holiday.

• Cash ACGBs are 3-5bps cheaper, with the AU-US 10-year yield differential unchanged at -2bps.
• Swap rates are 3-5bps higher.
• The bills strip has bear-steepened, with pricing -2 to -7.
• RBA-dated OIS pricing is 2-6bps firmer across meetings beyond March. A cumulative 39bps of easing is priced by year-end compared to 67bps at the start of February.
• (Bloomberg Economics) -- The Reserve Bank of Australia is done hiking rates — it just doesn’t want to say so. Its quarterly statement and testimony from Governor Michele Bullock last week appeared mildly hawkish. But the RBA’s forecasts tell the real story. (See link)