Pares Post-RBA Sell-Off, Lowe’s Speech Digested

ACGBs are sharply stronger (YM +8.0 & XM +8.0) after US tsys finished 9-18bp richer across benchmarks following weaker JOLTs data and more US regional banks concerns.

• The local session is likely to reflect a market still digesting the RBA's surprise 25bp hike, as well as comments made by RBA Governor Lowe following the decision. Lowe stated that the bank risks entrenching inflation if it does not act quickly enough. He added that while they do not need to bring inflation back to target immediately, they cannot take too long either. The RBA is taking more time than other countries, aiming to preserve labour market gains, but there is a limit.
• Cash ACGBs opened 9bp richer with the AU-US 10-year yield differential at -6bp.
• Swap rates opened 7-9bp lower with the 3s10s curve 1bp steeper.
• Bills strip is flatter with pricing +4 to +7.
• RBA dated OIS opened 5-8bp softer with a 13% chance of a 25bp rate hike in June priced.
• The local calendar sees the release of April Final Judo Bank PMI Services and March Retail Sales.
• RBA Assistant Governor Ellis is scheduled to speak at the CEDA Conference (0555 BST).
• The AOFM plans to sell A$800mn of the 4.5% 21 April 2033 bond today.