J.P.Morgan Recommend Paying June RBA OIS

J.P.Morgan write “with OIS now pricing a little less than our RBA view, local risks suggest an outright short bias for the first time in months. Curves have bull steepened significantly, but in AUD this is offset to an extent by widening in BBSW-OIS, which had been unsustainably narrow. Given this, we see value in trades which acknowledge that the majority of the recent rally should stick, and terminal pricing stay materially lower than before Powell’s testimony, while also requiring central banks to hold the line rather than cutting. Cash-3s is deeply negative but that isn’t new, and is essentially EFP-driven, so shorts are best expressed in OIS (and reserved for the brave). Pay June RBA OIS.” They issued the recommendation with June RBA-dated OIS printing at 3.46%.