Slightly Cheaper, Narrow Ranges, Pressured By US Tsys & JGBs

ACGBs (YM -1.0 & XM -3.0) are flat to slightly cheaper after dealing in relatively narrow ranges so far in the Sydney session. With the local calendar empty today, offshore influences are the driving force for today’s session.

• US tsys are holding cheaper in Asia-Pac morning trade, with cash tsys 3-5bps cheaper across the major benchmarks. The curve has steepened. TYZ3 deals at 105-22+, -0-09+ compared to NY closing levels.
• This move in US tsys can be largely attributed to a bear-steepening in JGBs following a Sunday article in the Nikkei newspaper that reported BOJ officials were pondering whether to tweak the settings of the yield-curve control program at the upcoming policy meeting.
• Cash ACGBs are 1-3bps cheaper, with the AU-US 10-year yield differential unchanged at -19bps.
• Swap rates are 1-3bps higher, with the 3s10s curve steeper and EFPs little changed.
• The bills strip is little changed, with pricing -2 to +1.
• RBA-dated OIS pricing is flat to 2bps softer across meetings, with terminal rate expectations at 4.34% (+27bps) ahead of Wednesday's Q3 CPI data.
• RBA Governor Bullock gives a speech at CBA’s Annual Conference tomorrow.