Richer, Curve Steeper, Awaits RBA SoMP Tomorrow

ACGBs are stronger (YM +12.0 & XM +7.0) with the 3-year futures contract close to session bests. The 10-year contract tracked US tsy futures which pared early post-NY session gains in Asia-Pac trade. Cash tsys are closed until the London session due to the observance of a national holiday in Japan. Cash ACGBs are 7-12bp richer with the 3/10 curve 5bp steeper.

• Swap rates are 7-13bp lower with 3-year EFP slightly tighter.
• The bills strip bull flattened with pricing +3 to +16.
• RBA dated OIS is 6-17bp softer across meetings beyond August with early '24 leading. A 7% chance of a 25bp rate hike at the June meeting is priced with a cumulative tightening of 8bp priced by August. Terminal rate expectations sit at 3.90% with year-end easing at 24bp.
• The local calendar will release March Housing Finance data tomorrow. The highlight however will be the Statement on Monetary Policy. After the RBA’s surprise rate hike, the market will pour over the forecast update for clues about the policy outlook. Attention will also be paid to the discussion on services inflation given its emphasis in yesterday's decision statement.
• The US calendar sees the release of the March Trade balance and initial jobless claims data.