Slightly Cheaper Ahead Of CPI Monthly, Apr-33 Supply Due

ACGBs (YM -2.0 & XM -1.5) are slightly cheaper after US tsys finished little changed. The US 2-year finished little changed at 4.59%, while the 10-year yield was down 1.4bps to 4.23%. The 5-year yield closed at 4.22%, 1bp richer on the day, after a well-received $67bn auction (4.235% vs. 4.242% WI).

• Cash ACGBs are 1bp cheaper, with the AU-US 10-year yield differential 1bp lower at -20bps.
• Swap rates are 1-2bps higher, with the 3s10s curve little changed.
• The bills strip is cheaper, with pricing -1 to -3.
• RBA-dated OIS pricing is slightly firmer. A cumulative 38bps of easing is priced by year-end.
• Today the February CPI is released and expected to rise slightly to 3.5% y/y but forecasts range from 3.3% to 3.8%. The Westpac leading index for February also prints.
• (AFR) TD Securities expects February’s monthly price inflation to edge lower to 3.4% y/y, while Westpac has pencilled in a 0.6 per cent m/m increase, which will see the inflation gauge increase by 3.8 per cent in annual terms. Scotiabank is expecting the annual print at 3.5 per cent. “More important will be whether trimmed mean CPI continues to decelerate.”
• Also today, the AOFM plans to sell A$800mn of the 4.5% Apr-33 bond.