Richer & Near The Session’s Best Levels

ACGBs (YM +5.0 & XM +8.5) 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.

• The latest round of ACGB Apr-27 supply goes well, with pricing comfortably through mids and the cover ratio at a robust 3.8375x.
• There has also likely been positive spillover from a slight richening in NZGBs following the RBNZ Policy Decision. The RBNZ's April monetary policy decision delivered few surprises. The central bank noted: "Overall, members agreed that the balance of risks was little changed since the February Statement."
• Cash ACGBs are 5-8bps 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 5-8bps 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 late-24/early-25 leading. A cumulative 32bps of easing is priced by year-end.