Richer After Post-FOMC Rally in U.S. Tsys

ACGBs are stronger (YM +11.0 & XM +9.0) as U.S. Tsys bull steepen after the Federal Reserve hikes 25bp with a perceived dovish tone. While the dot plot was unchanged from December (peak of 5.1%), the Fed indicated future hikes might depend on the effects of the recent financial turmoil on the economic outlook. There was however no hint of easing this year despite current market pricing of -72bp by year-end. At his post-meeting press conference, Fed Chair Powell also mentioned that the FOMC had considered a pause in rate hikes for today. At the bell 2-year and 10-year yields were respectively 22bp and 17bp lower.

• Cash ACGBs open 10-11bp stronger with the 3/10 curve 1bp steeper and the AU-US 10-year yield differential +5bp at -17bp.
• Swaps open 10-12bp richer with the 3s10s curve 2bp steeper and EFPs unchanged.
• Bills strip bull steepens with pricing +5 to +17.
• In line with post-FOMC developments in U.S. STIR, RBA dated OIS is 3-13bp softer for meetings beyond May with December leading. April meeting pricing opens at flat with easing expectations by year-end at 34bp.
• The local calendar is light until next week when February retail sales (Tue) and monthly CPI (Wed) are scheduled for release.