Modestly Weaker, Eyeing US CPI

ACGBs push away from session lows, sitting little changed (YM -2.0 & XM -1.5) on the day, as US Tsys tread water in Asia-Pac trade ahead of US CPI data and FOMC Minutes later today. There has been little meaningful macro news flow in today’s Asian session.

• The local calendar is light today with RBA Deputy Governor Bullock's appearance on the WEAI Monetary Panel (0545 BST) as the highlight.
• The latest round of ACGB Apr-29 supply priced comfortably through mids, but with a cover ratio below the 2.50x mark. The fact that the line is some way from YM basket inclusion, along with the richness of the belly of the curve, is likely to have weighed on the bid. There was no real movement in cash trading post-auction.
• Cash ACGBs are 1-2bp cheaper with the 3/10 curve 1bp flatter and the AU/US 10-year yield differential -1bp at -19bp.
• Swap rates are 3-5bp higher with EFPs slightly wider.
• Bills strip pricing is -2 to -4bp with early reds leading.
• RBA dated OIS pricing is flat to 3bp firmer across meetings.
• Elsewhere, Treasurer Chalmers said on ABC RN that Treasury still expects Australia to "slow considerably later this year" but that it will still avoid a recession.