Richer With US Tsys, US PCE Deflator Prints In Line With Expectations

ACGBs (YM +3.0 & XM +4.0) are richer after US tsys responded positively to March PCE Deflator data on Friday, which printed in line with expectations.

• PCE Deflator 0.3% m/m vs. 0.3%, 2.7% y/y vs. 2.6% est, 2.5% prior; PCE Core Deflator 0.3% m/m vs. 0.3% est, 2.8% y/y vs. 2.7% est, 2.8% prior.
• However, support for US tsys receded a little after a very strong Supercore: 0.39% m/m in March after 0.19% (initial 0.18%) in February and 0.75% (initial 0.66%) in Jan.
• Meanwhile, Personal Income (0.5% m/m vs. 0.5% est, 0.3% prior), Personal Spending (0.8% m/m vs. 0.6% est, 0.8% prior), Real Personal Spending (0.5% m/m vs. 0.3% est, 0.4% prior).
• Cash ACGBs are 4bps richer, with the AU-US 10-year yield differential 3bps lower at -18bps.
• Swap rates are 4-5bps lower.
• The bills strip has bull-flattened, with pricing flat to +4.
• RBA-dated OIS pricing is little changed. A cumulative 4bps of easing is priced by year-end.
• The local calendar is empty today, ahead of Private Sector Credit and Retail Sales data tomorrow.