Slightly Cheaper Ahead Of CPI Monthly Data

ACGBs (YM -1.0 & XM -2.5) are cheaper after US tsys witnessed a modest sell-off despite weaker-than-expected data across all releases.

• Durable Goods Orders printed -6.1% vs. -5.0% est, with ex-Trans -0.3% vs. 0.2% est and prior down revised to -0.1% from 0.5%. FHFA house prices increased less than expected in Dec, 0.1% m/m (cons 0.3) after 0.31% m/m, its softest monthly print since Jan’23. Conf. Board consumer confidence saw a sizeable miss in February, falling to 106.7 (cons 115.0) after a downward revised 110.9 (initial 114.8).
• US tsys have been under selling pressure for most of February as expectations for aggressive Fed easing have been pared after hawkish Fedspeak and hot inflation data.
• Cash ACGBs are 1-3bps cheaper, with the AU-US 10-year yield differential unchanged at -15bps.
• Swap rates are 1-3bps higher.
• The bills strip slightly cheaper, with pricing flat to -2.
• RBA-dated OIS pricing is little changed across meetings. A cumulative 36bps of easing is priced by year-end.
• Today, the local calendar will see CPI Monthly data for January. It is expected to increase moderately to 3.6% y/y from 3.4% in December. As it is the first month of the quarter it will contain limited updated information on services and will mainly cover goods prices.