Firmer Overnight, RBNZ Eyed

ACGBs have bull steepened in early Sydney trade, with the major cash benchmarks running 2-4bp richer across the curve as 7s outperform.

• This comes after a fairly rangebound round of overnight trade for futures, with YM failing to mount a challenge of its post-RBA peak, while XM’s own RBA peak capped price action in post-Sydney dealing. That leaves the former +3.0 & the letter +3.0, a little off their respective overnight highs.
• Bills run -1 to +6 through the reds, with RBA dated OIS now pricing a terminal rate of ~3.60%, well shy of the ~4.10% that was seen late last week.
• Final services & composite PMI data has come and gone, and won’t move the market, with A$800mn of ACGB May-32 supply providing the highlight of the domestic docket during the remainder of the day.
• The latest RBNZ monetary policy decision will be a likely source of some trans-Tasman impetus, with a 50bp hike fully priced and universally expected, leaving the Bank’s guidance and tone front and centre (assuming such a move is delivered).