Little Changed, RBA Kohler: Some Time Before Inflation In Desired Range

ACGBs (YM -1.0 & XM flat) are slightly weaker after US tsys finished little changed on Monday. It was a subdued start to the week ahead of the much-awaited CPI report later today. Lunar New Year Holidays in Asia and European Carnival celebrations lightened trading volumes too.

• US Inflation expectations in January remained unchanged at the short- and longer-term horizons. They declined slightly at the medium-term horizon, according to the NY Fed's survey of consumers. Meanwhile, consumers were more optimistic about their financial situation.
• US equity markets edged higher, extending the record-breaking run.
• (BBG) Inflation in Australia is in retreat, but it will take some time before it returns to the desired target range and the risks around those expectations remain substantial, the Reserve Bank of Australia's Head of Economic Analysis Marion Kohler said. (See link)
• Cash ACGBs are 1bp cheaper, with the AU-US 10-year yield differential unchanged at -1bp.
• Swap rates are 1bp higher.
• The bills strip has slightly bear-steepened, with pricing flat to -2.
• RBA-dated OIS pricing is 1-2bp firmer for meetings beyond August. A cumulative 37bps of easing is priced by year-end.
• Today, the local calendar sees Westpac Consumer and NAB Business Confidence.