Aussie bond futures traded in a relatively tight range ahead of U.S CPI data. After spending much of the day in negative territory YM and XM eked out gains of +1.0 and +2.0, respectively. Cash bonds were 2-3bp richer with the 3/10 cash curve flat on the day. The AU/U.S. 10-year yield differential was unchanged ~5bp.

• AU swaps rates were 1-3bp lower with the curve a tad steeper.
• Bills were flat to 3bp firmer along the strip.
• After a small push higher in morning trade RBA-dated OIS terminal rate expectations (Sep/Oct-23) reversed course mid-session to close at 4.12%, down 3bp on the day and down 10bp from yesterday’s intraday high of 4.22%.
• Local data delivered divergent paths for consumer and business confidence in January with Westpac’s measure of consumer sentiment declining 6.9% m/m and NAB business confidence rising for the second consecutive month to +6. The market took the data in its stride, instead focusing on U.S. CPI data, slated for NY hours.
• Looking ahead, Wednesday's local docket will be headlined by the appearance of Governor Lowe given the scrutiny surrounding his future in the press, along with speculation re: potential successors if his term is not extended.