Little Changed, Subdued Dealings, RBA Minutes Tomorrow

ACGBs (YM +1.0 & XM +0.5) are little changed in the Sydney session, amidst an overall subdued trading environment. Today, the domestic calendar has been light, and with cash US tsys closed for the Presidents Day holiday, local market activity has been quiet and lacking clear direction.

• Cash ACGBs are 1bp richer, with the AU-US 10-year yield differential 3bps lower at -9bps. At -9bps, the cash AU-US 10-year yield differential currently sits in the bottom half of the range of +/-30bps which has been observed since November 2022.
• Swap rates are flat to 1bp lower.
• Bills are little changed, with pricing +/- 1 across the strip.
• RBA-dated OIS pricing is little changed across meetings. A cumulative 35bps of easing is priced by year-end.
• Tomorrow, the local calendar will see the RBA Minutes of the Feb. Policy Meeting, ahead of the Wage Price Index (WPI) on Wednesday.
• The Q4 WPI is expected to rise 0.9% q/q with the annual rate rising to 4.1% y/y up from 4.0% in Q3. The RBA said in its February meeting statement that it didn’t expect wages growth “to increase much further” and that it “remains consistent with the inflation target” assuming productivity growth improves.