Richer, Spillover Bid From NZGBs

ACGBs are richer (YM +6.0 & XM +2.5) with the curve steeper as the local market enjoyed spillover from the bid in NZGBs following the RBNZ indicating that the current OCR level would be the peak.

• Cash ACGBs are 3-6bp richer with the 3/10 curve 3bp steeper and the AU/US 10-year yield differential +1bp at -6bp.
• The first round of ACGB Dec-34 supply, following its syndicated opening on April 19, showed solid demand with the average yield printing through prevailing mids and a cover ratio of 3.6250x. The outcome aligned with the recent trend of robust pricing observed at ACGB auctions.
• Swap rates are 3-6bp lower with EFPs little changed.
• The bill strip bull flattens with pricing +2 to +7.
• RBA dated OIS is 1-7bp softer across meetings with a 17% chance of a 25bp rate hike in June priced.
• The local calendar is light ahead of April Sales on Friday. While the official ABS retail estimates account for regular seasonal fluctuations, they can encounter challenges during the Easter period. This is primarily due to the variable timing of the holiday and its proximity to other holidays, which can disrupt the accuracy of the adjustments.