Pares Gains With US Tsys in Asia-Pac Trade

ACGBs sit firmer (YM +10.0 & XM +5.5) but well off session bests as US tsy futures pare gains in early Asia-Pac trade. Cash ACGBs are 6-10bp richer with the 3/10 curve 4bp steeper and the AU-US 10-year yield differential +5bp at +2bp.

• A reminder that cash tsys are closed until the London session due to the observance of a national holiday in Japan.
• The March trade balance, just released, showed a much larger than expected surplus of A$15.27bn (A$13.00bn est.) with exports +4% m/m and imports +2% m/m. There was no material impact on market pricing following the release.
• Swap rates are 6-11bp lower with EFPs little changed.
• The bills strip is flatter with pricing +2 to +14.
• RBA dated OIS opened 6-15bp softer across meetings beyond August with early '24 leading. A 7% chance of a 25bp rate hike at the RBA's June meeting is priced with a cumulative tightening of 7bp priced by August. Terminal rate expectations sit at 3.90% with year-end easing at 21bp.