Richer Ahead Of Employment Data, RBA Bullock In Front Of Senate

ACGBs (YM +3.0 & XM +4.0) are richer with RBA Bullock fielding questions in the Senate. So far there has been no market-moving information.

• Overnight, US tsys rebounded from losses sparked by hotter-than-expected US CPI data on Tuesday. US tsys bull-steepened, with yields 2-8bps lower.
• Chicago Fed’s Goolsbee stuck to his dovish guns stating that he doesn’t believe the last mile of the inflation fight is the hardest and that inflation can be a bit higher but remains on track.
• US PPI data for December was revised down from -0.1% to -0.2%.
• Elsewhere, UK headline and core inflation data printed softer than expected at respectively 4% y/y and 5.1% y/y.
• Cash ACGBs are 3-4bps richer, with the AU-US 10-year yield differential 1bp higher at -3bps.
• Swap rates are 2-3bps lower.
• The bills strip is flat to +2.
• RBA-dated OIS pricing is little changed.
• Today, the local calendar sees January's Employment Report and February's Consumer Inflation Expectation data.
• Given December’s large 65.1k drop, attention will be on whether labour demand is still strong enough to unwind most of that move. Bloomberg consensus is forecasting a 25k rise in new jobs with the unemployment rate ticking up 0.1pp to 4%. The latter hasn’t started with a ‘4’ since February 2022.