Richer With US Tsys After FOMC Decision

ACGBs (YM +3.0 & XM +2.0) are richer after the FOMC meeting delivered few surprises. As widely anticipated, the Federal Reserve decided to raise the funds rate by 25 basis points, bringing it to a range of 5.25% to 5.50%. This rate level has not been seen since early 2001. This is the highest since early 2001. The ambiguity in Chair Powell's follow-up press conference provided no clear direction. The market seemed to interpret the presser as slightly dovish, contributing to a minor dip in yields. This move served to recover some of the recent backup due to concerns about a potentially more hawkish stance.

• FOMC-dated OIS showed little net change in near-term meeting expectations, with +5bp for Sep and a cumulative +11bp for Nov to a terminal 5.44%.
• Cash ACGBs opened 2-3bp richer with the AU-US 10-year yield differential -1bp at +12bp.
• Swap rates are 2-3bp lower with the 3s10s curve steeper.
• The bills strip twist flattens with pricing -1 to +5.
• RBA-dated OIS pricing is 1-3bp softer across meetings.
• On the data front today we have Q2 terms of trade with export and import prices due. Export prices are seen down -6.7% (prior 1.6%), while import prices are projected at -0.8% (prior -4.2%).