Richer, Narrow Range, US Tsys Extend Friday Strength

ACGBs are stronger (YM +6.0 & XM +4.0) after trading in a narrow range in the Sydney session. Without domestic catalysts, local trading appears to have been guided by US tsys, which are slightly stronger in Asia-Pac trade after political unrest in Russia over the weekend. Cash US tsys are 1-2bp richer.

• Cash ACGBs are 4-7bp richer with the AU-US 10-year yield differential is +2bp at +22bp.
• Swap rates are 4-7bp lower with the 3s10s curve steeper.
• The bills strip bull flattens with pricing +6 to +8.
• RBA-dated OIS pricing is 3-7bp softer across meetings.
• The local calendar is light today ahead of CPI Monthly on Wednesday.
• AFR - A contender to replace Reserve Bank of Australia governor Philip Lowe is less concerned about a wage-price spiral breaking out and could prioritise low unemployment – closer to the desires of the Labor government and trade unions. (See link)
• Australia’s central bank is concerned that actively selling down bonds bought during the pandemic could compromise future efforts to stimulate the economy via quantitative easing, documents released under a Freedom of Information Act request by Bloomberg News showed. (See link ICYMI)