Fed Williams And Capex Fail To Spark A Market Move

ACGBs are slightly weaker after comments from NY Fed President Williams and Q4 Capex data fail to spark much of a market reaction, with follow through from the minutes covering the latest FOMC meeting the likely driver. YM is -4.0 and XM is -3.0, both just off worst levels

• Capex spending rises a better-than-expected 2.2% Q/Q in Q4 with the 5^th estimate of investment plans for 2022/23 at A$158.7bn, +1.9% above the 4^th estimate. The first estimate for 2034/24 investment expectations came in at A$129.7bn, up 11% on 2022/23. Likely taming the market’s reaction is the fact that, in periods of high inflation, interpretation is more difficult because the price/volume split is unknown.
• ACGB cash yields and swap rates are ~4bp higher across the curve.
• Bills are 2-4bp softer through the reds.
• RBA-dated OIS firms 3-4bp for meetings beyond June with the terminal rate at ~4.26%, after yesterday's flattener flow-driven session in the wake of soft WPI data (Fed minutes a potential catalyst here as well). March meeting pricing remains at a 95% chance of a 25bp hike.