Holding Gains As Market Calls End To Tightening

In two-way trade ACGBs hold mid-range (YMM3 +23.4 & XMM3 +15.8) eyeing U.S Tsys as NAB Business Survey data fails to sustain a locally driven reaction.

• While business confidence was soft, business conditions remained at a robust +17 with broad-based strength. In isolation, the data would have pointed to a further hike in April. The market responded accordingly with yields jumping around 2bp on the release.
• That move however proved fleeting with ACGBs back tracking oscillations in U.S Tsys in Asia-Pac trade. At the time of writing, cash ACGBs were trading mid to high in their ranges in response to a cash Tsy twist flattening with 2-year yields 16bp higher and the 10-year -1bp.
• Swaps rates are 12-22bp lower but 10-12bp off session bests.
• Also of note, RBA-dated OIS has, at least temporarily, called an end to the tightening cycle with April meeting pricing around -2bp and 17bp of easing (-25bp earlier) priced by end-22.