Richer After Post-CPI Bull Steepening For US Tsys

ACGBs (YM +7.0 & XM +5.5) are sharply richer after US tsys finished 3-11bps richer, with the curve steeper, following US CPI data that more-or-less printed in line.

• CPI m/m (0.3% vs. 0.2% est), y/y (3.4% vs. 3.2% est); Ex Food and Energy m/m (0.3% vs. 0.3% est), y/y (3.9% vs. 3.8% est).
• AFR reported TD Securities said: “In our view, today’s CPI report helps to underscore that the path toward inflation normalisation is likely to be prolonged.” While, ANZ Research also struck a cautious tone on rate cuts: “In ANZ’s view, the market is well ahead of itself, pricing a high likelihood of a Fed cut by March.”
• The 10-year yield was 6bps lower at 3.97% versus Thursday's peak of 4.066%. Notably, it was the first close below 4% since January 3.
• Bitcoin briefly traded above $US49,000, a two-year high before paring those gains to finish around $US46,500.
• Cash ACGBs are 5-6bps richer, with the AU-US 10-year yield differential unchanged at +9bps.
• Swap rates are 4-6bps lower, with the 3s10s curve steeper.
• The bills strip has bull-flattened, with pricing +1 to +9.
• RBA-dated OIS pricing is 3-6bps softer for meetings beyond May.
• Today, the local calendar is relatively light, with Home Loans data as the sole release.