No Reaction To BoP Data, Awaiting RBA Decision

ACGBs are richer (YM +3.0 & XM +4.0), unchanged after the release Q1 Balance Of Payments data. The current account surplus widened less than economists expected in 1Q, printing a A$12.283bn (A$15.0bn est.) from a revised A$11.70bn in Q4. Net Exports printed a contribution to Q1 GDP of -0.2ppt versus expectations of -0.5.

• Cash ACGBs are 3bp richer with the AU-US 10-year yield differential +1bp at +6bp.
• RBA-dated OIS pricing is 2-5bp richer across meetings. The market is currently attaching a 38% chance of a 25bp hike at today’s meeting.
• Swap rates are 6bp lower with EFPs 3bp lower.
• Bills pricing is 4-5 stronger across the strip.
• The RBA decision appears to be a contentious one, with economists holding divergent views. Based on our analysis, we anticipate that the RBA will opt to observe and evaluate another month's worth of data, including the Q1 national accounts report scheduled for tomorrow. However, this does not imply that the hiking cycle has come to an end. See MNI RBA Preview here.