Firmer & Flatter On Global Lead

ACGBs have firmed, catching up to the overnight move in futures/core global FI markets, which centred on the factors outlined elsewhere (Fed communique, pre-U.S. CPI positioning, cautious comments from an ECB hawk re: QT & a dovish MNI ECB sources piece). This leaves the major benchmarks running 6.0-8.5bp richer across the curve, while YM is +7.0 & XM is +7.5, as futures operate a touch below their late overnight/early Sydney highs and the curve bull flattens.

• Bills are 2-9bp richer through the reds, with the strip bull flattening.
• Meanwhile, RBA dated OIS pricing comes in a touch when it comes to the terminal cash rate, showing around the 3.80% mark vs. a little below 3.90% seen late yesterday, while Feb ’23 meeting pricing continues to show around 20bp of tightening.
• There hasn’t been much in the way of meaningful domestic news flow to digest since yesterday’s Sydney close, leaving global matters at the fore.
• Looking ahead, trade balance data headlines the domestic docket today, while Chinese inflation data will also generate some interest. However, participants will likely have at least one eye on the U.S. CPI print, which will cross in NY hours, perhaps limiting risk taking desires/capability.