Cheaper, Narrow Ranges, Subdued Session With No Cash Tsys

ACGBs (YM -6.0 & XM -2.5) are holding cheaper after dealing in relatively narrow ranges in today’s Sydney session. With the domestic calendar light, local participants have likely been on headlines and US tsys watch.

• However, today’s news flow has been light, with US tsy futures dealing slightly stronger. Cash Us tsys have not been trading in today’s Asia session due to a Japanese holiday.
• Key event risk this week is US CPI on Wednesday, and US Retail Sales and Claims data on Thursday.
• Cash ACGBs are 2-5bps cheaper, with the AU-US 10-year yield differential 1bp tighter at -3bps. The 3/10 curve is flatter.
• Swap rates are 3-4bps higher.
• The bills strip has bear-steepened, with pricing -2 to -6.
• RBA-dated OIS pricing is 3-6bps firmer across meetings beyond August. A cumulative 39bps of easing is priced by year-end compared to 67bps at the start of February.
• Tomorrow, the local calendar sees Westpac Consumer and NAB Business Confidence, along with remarks by Marion Kohler, RBA’s Head of Economic Analysis, at the Australian Business Economists Annual Forecasting Conference in Sydney.