Futures Curve Holdings Its Twist-Flattening, RBA Kent Speaking

The ACGB futures curve (YM -1.0 & XM +2.0) has retained its twist-flattening in the Sydney session. The local data calendar has been light so far today, with CBA Household Spending data due later.

• However, Assistant Governor Chris Kent said in a speech at Bloomberg’s office in Sydney, which is underway, is currently providing a focal point for the local market. Bloomberg reports that “Australia’s most aggressive monetary policy tightening in about three decades is working to cool inflation, though lags in transmission mean the full effects of interest-rate increases to date are still to be felt.” (See link)
• US Tsys have ticked higher in recent trade as participants perhaps focus on yesterday's Fedspeak by Atlanta Fed President Bostic who reaffirmed his view that benchmark rates are high enough to get inflation under control without dragging the economy into recession. This leaves cash tsys 1-2bps richer across the major benchmarks, the belly is marginally outperforming.
• Cash ACGBs are 1bp cheaper to 3bps richer, with the AU-US 10-year yield differential 3bps lower at -21bps.
• Swap rates are 1bp higher to 4bps lower, with the 3s10s curve flatter.
• Bills strip pricing is flat to -1.
• RBA-dated OIS pricing is little changed across meetings, with terminal rate expectations at 4.19%.