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Holding Richer, Tight Range


ACGBs are holding richer (YM +2.0 & XM +3.0) with a narrow range with U.S Tsys little changed in Asia-Pac trade ahead of PCE deflator data out later today. Private Sector Credit data for February showed a below consensus print of +0.3% M/M (+0.4% expected) but failed to impact the market as investors have already turned their attention to the upcoming RBA decision next Tuesday.

  • The market is still debating whether this week's CPI and retail sales data will be enough to counterbalance strong business conditions and robust jobs data and lead to a pause in interest rate hikes.
  • RBA dated OIS suggests that it has been with an 18% chance of a 25bp hike priced.
  • Cash ACGBs are 3bp richer with the AU/US 10-year yield differential -1bp at -23bp.
  • Swaps rates are 2-3bp lower with EFPs 1bp wider.
  • Bills strip pricing is flat to +2 with reds leading.
  • Elsewhere, ABC News reported that the Australian Federal Government has submitted a proposal to the Fair Work Commission, advocating for a pay increase for the country's lowest-paid workers that is at least in line with inflation. Meanwhile, business groups are arguing for a much smaller increase.

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