Lowe Confirms Closer To A Pause, Initial Spike Higher Pared

This morning has seen RBA Governor Lowe note that the Bank is closer to a pause having moved a long way in a short period re: tightening. He stressed that the Bank is approaching the April meeting with "a completely open mind," highlighting its data-dependent stance, while flagging the potential for a pause in the tightening cycle as soon as next month. The Q&A portion of the appearance is ongoing.

• YM -3.0 & XM unch., while wider cash ACGBs are 3bp cheaper to little changed as the curve flattens. There hasn't been much in the way of lasting reaction to Lowe's remarks, after an initial spike higher on the release of the speech was quickly pared.
• ACGBs had twist flattened early on in response to the hawkish tilt from Fed Chair Powell’s testimony to congress, where he canvassed the possibility of larger, faster hikes and a higher terminal rate.
• The AU-US 10-year yield differential is 1bp lower at -28bp.
• RBA-dated OIS has opened mixed but little changed across meetings after yesterday's large move lower. There is ~14bp of tightening priced for next month's meeting at present. Terminal rate expectations are around 4.02%, slightly higher than yesterday’s close.
• The AOFM is slated to sell A$500mn of ACGB Jun-35 today.
• No local data is scheduled for release on Wednesday.