Richer, US Tsys Move Away From YTD Yield Highs, Employment Report Due

ACGBs (YM +5.0 & XM +6.0) are richer after a strong NY session for US tsys. There was a modest risk-off tone to markets overnight, with US tsys yields lower, credit spreads wider, US equities weaker and oil prices weaker. Technical buying, bargain hunting and an especially well-received 20-year auction also helped US tsys move away from YTD yield highs.

• Newsflow has been minimal overnight. Today’s US calendar will see Weekly Claims, Existing Home Sales and Fed Speak from Bowman, Williams, Bostic and Collins.
• Cash ACGBs are 5-6bps richer, with the AU-US 10-year yield differential at -26bps.
• Swap rates are 4-6bps lower, with the 3s10s curve flatter.
• The bills strip has bull-flattened, with pricing +1 to +5.
• RBA-dated OIS pricing is 2-4bps softer for meetings beyond September. A cumulative 16bps of easing is priced by year-end.
• Today, the local calendar will see the Employment Report for March. There will be a lot of focus and uncertainty around this release after the outsized 116.8k rise in new jobs in February due to the timing of new starts around holidays. There could be payback for the outsized March outcome.
• Bloomberg consensus expects a moderate 10k rise with the unemployment rate returning to its November/December level of 3.9%.
• Today’s local calendar also sees NAB Business Confidence for Q1.