Holding Weaker, Awaiting Treasurer's Post-Budget Address

ACGBs are holding their overnight weakening (YM -3.0 & XM -1.0) after trading in a relatively tight range in the Sydney session. There has been little market reaction to the Federal Budget, with the improved fiscal outlook well anticipated. A thin local data calendar likely leaves participants on headline watch ahead of US CPI later today.

• Treasurer Chalmers gives his post-Budget address at 0330 BST / 1230 AEST.
• The latest round of ACGB Apr-29 supply goes smoothly with the weighted average yield 1.21bp through prevailing mids (per Yieldbroker) and the cover ratio printing a healthier 3.3375x versus 2.37x at the April 12 auction.
• The AOFM announced that the issuance of Treasury Bonds in 2022-23 will be around A$80 billion versus A$95bn announced in the October Budget 2022-23 update. Based on Budget forecasts, issuance of Treasury Bonds in 2023-24 is expected to be around $75 billion. Issuance of Treasury Indexed Bonds is anticipated to be between $2 and $4 billion.
• Cash ACGBs are 1-2bp cheaper with the 3/10 curve 1bp flatter and the AU-US 10-year yield differential unchanged at -5bp.
• Swap rates are flat to 1bp higher with EFPs 1bp tighter.
• Bills pricing is -1 to -3.
• RBA dated OIS pricing is flat to 3bp firmer across meetings.