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Sharply Cheaper After Yesterday’s Holiday, Easing Expectations For End-24 Pared

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ACGBs (YM -10 & XM -9.0) are sharply cheaper after US tsys reacted negatively to the Q1 GDP report. The local market was closed yesterday for the ANZAC Day holiday.

  • US GDP rose by an annualised 1.6%, below the 2.5% consensus, partially explained by a shortfall in private consumption (2.5% against 3.0% expected). The core PCE deflator was stronger than expected, running at an annualised 3.7% (3.4% expected).
  • Weekly claims were also lower than expected.
  • US rate cut expectations saw a further paring, sending 2- and 10-year yields 6-7bps higher.
  • There was little reaction in cash US tsys after the $44B 7Y note auction printed in line with WI of 4.716%; bid-to-cover slips to the lowest since November at 2.48x vs. 2.61x last month.
  • The focus turns to Friday's US Data Calendar: Personal Income/Spending, UofM Sentiment, while May Treasury options expire.
  • Cash ACGBs are 11-12bps cheaper, with the AU-US 10-year yield differential 4bps higher than Wednesday's close at -17bps.
  • Swap rates are 12bps higher.
  • The bills strip has bear-steepened, with pricing -5 to -15.
  • RBA-dated OIS pricing is 8-17bps firmer across meetings. A cumulative 4bps of easing is priced by year-end.
  • Today, the local calendar will see PPI and Terms of Trade data for Q1.
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ACGBs (YM -10 & XM -9.0) are sharply cheaper after US tsys reacted negatively to the Q1 GDP report. The local market was closed yesterday for the ANZAC Day holiday.

  • US GDP rose by an annualised 1.6%, below the 2.5% consensus, partially explained by a shortfall in private consumption (2.5% against 3.0% expected). The core PCE deflator was stronger than expected, running at an annualised 3.7% (3.4% expected).
  • Weekly claims were also lower than expected.
  • US rate cut expectations saw a further paring, sending 2- and 10-year yields 6-7bps higher.
  • There was little reaction in cash US tsys after the $44B 7Y note auction printed in line with WI of 4.716%; bid-to-cover slips to the lowest since November at 2.48x vs. 2.61x last month.
  • The focus turns to Friday's US Data Calendar: Personal Income/Spending, UofM Sentiment, while May Treasury options expire.
  • Cash ACGBs are 11-12bps cheaper, with the AU-US 10-year yield differential 4bps higher than Wednesday's close at -17bps.
  • Swap rates are 12bps higher.
  • The bills strip has bear-steepened, with pricing -5 to -15.
  • RBA-dated OIS pricing is 8-17bps firmer across meetings. A cumulative 4bps of easing is priced by year-end.
  • Today, the local calendar will see PPI and Terms of Trade data for Q1.