Holding Weaker Ahead Of Lowe

Futures consolidate the overnight/early Sydney dip, with YM & XM trading -4.5. The 3- to 12-Year zone of the curve provides the weak area in cash ACGB trade.

• The market remains focused on RBA Governor Lowe’s upcoming address (due in ~40 minutes time). A quick reminder that the RBA’s decision to retain “patient” in the forward guidance issued at the end of yesterday’s monetary policy decision, coupled with a lack of hawkish evolution in the guidance on the whole, provided a dovish surprise. Still, this didn’t meaningfully impact market pricing re: RBA rate hikes (we have fleshed that out previously). Markets price a 15bp cash rate hike come the end of the Bank’s June meeting, while the sell-side consensus is seemingly looking for lift-off in August.