Cheaper, Near Session Lows, Powell Part II Later Today

ACGBs (YM -1.0 & XM flat) sit in negative territory and near session lows. There hasn’t been much in the way of domestic drivers to flag, outside of the previously outlined Home Loan Values and Trade Balance data.

• (MT Newswires) "The economy remains weak but looks consistent with positive jobs growth and despite an improvement in productivity, unit labour cost growth (a proxy for services inflation) remains robust," Morgan Stanley said, adding that it still expects the RBA to hold interest rates steady through the course of this year, before cutting rates in early 2025.
• Cash US tsys are 1-2bps cheaper in today’s Asia-Pac session after yesterday’s post-Powell bull-flattening. News flow has so far been light today. Later today sees Weekly Claims, Unit Labor Cost, and day two of Chair Powell's testimony, ahead of Non-Farm Payrolls on Friday.
• Cash ACGBs are flat to 1bps cheaper after being flat to 2bps richer earlier in the session. The AU-US 10-year yield differential is 3bps higher at -11bps.
• Swap rates are flat to 1bp lower, with the 3s10s curve flatter.
• The bills strip is slightly cheaper, with pricing flat to -1.
• RBA-dated OIS pricing is unchanged across meetings. A cumulative 43bps of easing is priced by year-end.
• Tomorrow, the local calendar is empty.