Richer, Narrow Range, Q2 CPI On Wednesday

ACGBs (YM +2.0 & XM +2.0) are slightly richer after trading in a narrow range in the Sydney session. There hasn’t been much local data other than the preliminary Judo Bank PMI data.

• US tsys are holding marginally cheaper in today’s Asia-Pac session with ranges narrow.
• Cash ACGBs are 2bp richer with the AU-US 10-year yield differential -3bp at +15bp.
• The 3s10s swap curve has bull steepened with rates flat to -2bp.
• The bills strip has bull steepened with pricing flat to +3.
• RBA-dated OIS pricing 1-2bp softer across meetings. A 60% chance of a 25bp hike is priced for August.
• (AFR) Economists are urging Jim Chalmers to give the Reserve Bank more voting power on the new monetary policy board, warning the central bank may lose control of interest rates to outsiders under the proposed model. (See link)
• Tomorrow the local calendar sees no data releases ahead of Q2 CPI on Wednesday. Bloomberg consensus expects headline CPI to print +1.0% q/q (5.5% y/y) versus +1.4% q/q (5.6% y/y) in Q1. Power rebates are holding down inflation while goods prices continue to rise. Trimmed Mean CPI is forecast to print +1.1% q/q (6.0% y/y) from +1.2% (6.6% y/y) in Q1, +1.7% in Q4 and +1.9% in Q3.