Richer, Awaiting US CPI Data & The FOMC Minutes

ACGBs (YM +3.0 & XM +8.0) are richer and near session highs. In the absence of domestic data, the local market has extended overnight moves in line with US tsys in today’s Asia-Pac session ahead of US CPI & the release of the FOMC Minutes. Cash US tsys are currently dealing 1bp richer. (See MNI U.S. CPI Preview: Apr 2024 - Key Framing Of Trends With June Cut Seen As A Coin Toss here)

• The latest round of ACGB Apr-27 supply went well, with pricing comfortably through mids and the cover ratio at a robust 3.8375x.
• There has also likely been a positive spillover from a 1-3bps richening in NZGBs following the RBNZ Policy Decision. The RBNZ's April monetary policy decision delivered few surprises.
• Cash ACGBs are 4-8bps richer, with the AU-US 10-year yield differential 3bps lower at -26bps, just above the bottom of the range it has traded in since late 2022.
• Swap rates are 5-7bps lower, with the 3s10s curve flatter.
• The bills strip has bull flattened, with pricing flat to +4.
• RBA-dated OIS pricing is flat to 5bps softer across meetings, with early-25 leading. A cumulative 32bps of easing is priced by year-end.
• Tomorrow, the local calendar sees CBA Household Spending and Consumer Inflation Expectations data.