Cheaper, RBA Board Didn’t Discuss Rate Move In March, May-41 Supply Tomorrow

ACGBs (YM -5.0 & XM -9.0) are holding cheaper on the day, but unchanged after the release of the RBA’s March Meeting Minutes.

• The RBA Board did not discuss a possible change in rates in either direction, as it was “appropriate to leave the cash rate target unchanged” and the data had been “broadly as expected”.
• Both upside and downside risks to inflation were considered but seen as “a little more even”. Given it is still going to take “some time” for the RBA to feel confident that inflation will return to target, rates are likely to be left at 4.35% for some months.
• Cash US tsys are dealing flat to 1bp richer in today’s Asia-Pac session.
• Cash ACGBs are 1-10bps cheaper, with the AU-US 10-year yield differential at -25bps.
• Swap rates are 5-8bps higher, with the 3s10s curve steeper.
• The bills strip has bear-steepened, with pricing flat to -6.
• RBA-dated OIS pricing is 2-3bps firmer for meetings beyond May. A cumulative 37bps of easing is priced by year-end.
• Tomorrow, the local calendar is empty, apart from the AOFM’s planned sale of A$300mn of 2.75% May-41 bond. The AOFM also plans to sell A$800mn of the 2.50% May-30 bond on Friday.