Free Trial
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
AUSSIE BONDS
The market moving potential of today’s data didn’t disappoint with downside surprises from GDP and CPI sparking a short-end led ACGB rally as it threw weight behind the RBA’s forecast that inflation peaked in Q422. YM +9.0 & XM +6.5 at the close. Cash ACGBs close near session highs 6-9bp richer. AU/US cash yield differential tightens 6bp to -14bp, its lowest level since the RBA’s February meeting.
- Swaps strengthen with rates 7-9bp lower with the 3s10s curve 2bp steeper.
- Bills were +6-10bp richer (except IRH3) through the reds, with the back end of the whites leading.
- RBA-dated OIS pricing softens 7-15bp for meetings beyond May, with the front meetings -1 to -4bp. Terminal rate pricing closes at ~4.18% versus 4.35% yesterday.
Fig. 1: RBA-Dated OIS Pre- & Post-Data
Source: Bloomberg / MNI - Market News
- While substantial, it is important to remember that monthly CPI is volatile. Rather than a proper monthly series it is a rolling release measure, with the first month of the quarter only updating 62% of the basket.
- While largely ignored, China’s manufacturing PMIs beat. Commodity prices have to some extent factored in China’s reopening, but the RBA will be aware of the typical relationship between China PMIs, commodity demand, the terms of trade, and ultimately Australia’s nominal growth.
- With the market scaling back tightening expectations, ACGBs appear set for a period of outperformance. Nonetheless, the outright direction is still likely to be determined by events abroad.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
We are facing technical issues, please contact our team.
ok
Your request was sent sucessfully! Our team will contact you soon.
ok