Focus On The SVB Situation Remains

ACGBs close firmer on the day (YM +12.4 & XM +6.3) but well off bests set before U.S. authorities made announcements about the Silicon Valley Bank (SVB) situation in early Asia-Pac trade. Cash ACGBs close 6-13bp lower with the 3/10 curve 6bp steeper.

• The 3s10s swaps curve bull steepens 5bp on the day with rates 2-8bp lower and EFPs 4-5bp wider.
• The bills strip richened 4-11bp on the day, led by late whites/early reds, but was well off session bests.
• RBA dated OIS pricing closed 7-12bp softer for meetings beyond April with pricing for the April meeting declining to a 27% chance of a 25bp hike.
• While light today, the local calendar delivers this week two releases explicitly cited by the RBA as important for April’s policy discussion, namely February NAB Business Survey tomorrow and the February Employment Report on Thursday. After two consecutive monthly declines the market is looking for a strong result (BBG consensus +50k) to defuse expectations of labour market stagnation.
• Until then, the market will likely continue to track the direction of U.S. Tsys as it wades through information regarding SVB and the U.S. authorities’ policy initiatives. The U.S. calendar also has the release of February CPI slated for Tuesday.