Little changed, No Local Data, China Leaves 5Y LPR Unchanged

ACGBs (YM flat & XM -1.0) are mixed, in the middle of the Sydney session range. The local calendar is very light this week, with Judo Bank PMIs on Wednesday as the only release. Accordingly, local participants have likely been on headlines and US tsys watch.

• Against consensus expectations, the China 5-yr LPR was left unchanged at 4.20%, versus a forecast of 4.05%. The 1yr LPR was cut by 10bp to 3.45%. The consensus had been for this rate to fall to 3.40%. At the margin, the market is likely to be left disappointed, particularly in terms of no change to the 5yr LPR rate, as these longer-term rates tend to feed into home mortgage rates etc. So, it may dent sentiment around expectations for the housing market.
• Narrow ranges are persisting in early trade in US tsys on Monday, with little meaningful macro news flow crossing. US tsys sit ~1bp richer to ~1bp cheaper, with the curve twist steepening, pivoting on 7s.
• The cash ACGB curve has bear steepened, with yields flat to 1bp higher. The AU-US 10-year yield differential is 5bp tighter at -3bp.
• Swap rates are flat to 1bp higher.
• The bills strip has twist flattened with pricing -1 to +1.
• RBA-dated OIS pricing is little changed.