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Follows US Tsys Lower In Asia-Pac Trade


ACGBs are weaker (YM -11.0 & XM -10.0), at a Sydney session low and the lowest level since March 7, as US tsys extend Friday’s post-Payroll sell-off in Asia-Pac trading. Cash tsys are 1.2-4.4bp cheaper with tsy futures at 113-19, -8 versus NY closing levels ahead of the weekend.

  • On the data front, Q1 Company Profits fall short of expectations printing +0.5% q/q (+2.0% est.), but inventories beat printing +1.2% q/q (0.3% est.). Additionally, ANZ-Indeed job ads increase 0.1% m/m.
  • The RBA would need to sell a large portion of its portfolio of long-term Australian Commonwealth Government Bonds to slow the economy significantly, while injecting unpredictable volatility into fixed-income markets, making any form of quantitative tightening highly unlikely in the near future, ex-staffers and commentators told MNI (link)
  • Cash ACGBs are 10-11bp cheaper with the AU-US 10-year yield differential at +2bp.
  • Swap rates are 9-10bp higher with the 3s10s curve 1bp flatter.
  • The bills strip twist steepens with pricing +2 to -13.
  • RBA dated OIS pricing is 2-10bp firmer for meetings beyond August with Apr’24 leading. The market currently attaches a 52% chance of a 25bp hike at tomorrow’s meeting.

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