Off Session Lows After Domestic Data Drop

ACGBs are slightly stronger, but still within striking distance of session lows (YM -5.0 & XM -6.0), after Q1 real retail sales prints in line with market expectations (-0.6% q/q).

• “Outside of the COVID-19 pandemic period, this is the largest fall in retail sales volumes since the September quarter 2009,” according to the ABS.
• US tsys are off session cheaps with US equity futures a touch softer.
• Cash ACGBs are 4-6bp cheaper with the AU-US 10-year yield differential -1bp at -4bp.
• Swap rates are 3-5bp higher with the 3s10s curve 2bp steeper.
• The bills strip is steeper with pricing flat to -5.
• RBA dated OIS is little changed after the data with pricing 1-3bp firmer for meetings beyond October with early'24 leading.
• Earlier, CBA’s measure of household spending intentions for April fell 4.3% m/m to be up 3.7% y/y. While part of the weakness was due to fewer trading days in April, the annual rate continues to gradually moderate.
• Nov-27 linker supply went well with a cover ratio above 4.0x and the weighted average yield 1.98bp through the mid-rate yield of 0.5420% (Yieldbroker).