Curve A Touch Steeper With RBA Expectations Capping Early Bid

YM was happy to operate in the bottom half of its overnight session range during the first Sydney session of the week, while XM extended on post-settlement losses as we moved through the day. That leaves YM -12.0 & XM -14.0 as we move towards the bell, with the 10- to 15-Year sector of the ACGB curve providing the weakest point in wider cash trade. 10-Year ACGB yields tagged a fresh cycle high, breaching 3.25%.

• The wider tone was set by Friday’s U.S. Tsy-driven post-Sydney losses, with expectations re: RBA lift off at Tuesday’s meeting capping the early uptick.
• Both the 3- & 10-Year EFPs have tightened by ~2bp as of typing.
• There was no reaction in the space to the M/M dip in Melbourne Institute inflation expectations (-0.1%), while the Y/Y reading cooled a little (to 3.4% from the multi-year high of 4.0% observed in March). The space was back from best levels ahead of the prints, with no subsequent bid emerging.
• ANZ Job Ads dropped by 0.5% in April, although the measure remains 57.3% above the pre-pandemic level, with the data collator noting that “labour market conditions are very tight.”
• Focus is squarely on Tuesday’s RBA decision (the MNI markets team leans towards a 15bp rate hike come the end of tomorrow’s meeting, expect our full preview of the event to be released during the London morning).