Cheaper, Narrow Ranges, US Tsys Cheaper Today, Q1 CPI On Wednesday

ACGBs (YM -7.0 & XM -7.0) are cheaper after dealing in relatively narrow ranges in today’s Sydney session. With the domestic calendar empty, local participants have taken their directional lead from US tsys. So far in the Asia-Pac session, cash US tsys are 2-4bps cheaper across benchmarks.

• The latest Newspoll from The Australian shows that the two-party preferred split of voter support was steady at 51: 49 in favour of the incumbent Labor government but less than it received in the May 2022 election and in a vote that would likely result in a minority Labor government. The unchanged divide was despite 56% support for PM Albanese’s interventionist Made in Australia proposal. The next election is due by May 2025.
• Cash ACGBs are 6-7bps cheaper, with the AU-US 10-year yield differential 1bp lower at -33bps, hovering near a cycle low.
• Swap rates are 5-6bps higher, with the 3s10s curve steeper.
• The bills strip has bear-steepened, with pricing -1 to -8.
• RBA-dated OIS pricing is 1-6bps firmer for meetings beyond June, with mid-2025 leading. A cumulative 19bps of easing is priced by year-end.
• This week's local calendar highlight will be Q1 CPI data on Wednesday.