Slightly Cheaper, RBA Minutes Due

ACGBs (YM -1.0 & XM -2.0) are slightly cheaper after US tsy futures drifted lower on Monday. Cash US tsys were closed in observance of the Presidents Day holiday.

• Iron ore and copper were lower on Monday after the PBOC failed to deliver on expectations of a policy easing. There were also reports that new home prices fell during the Lunar New Year break.
• (AFR) ”Headwinds from the ongoing crisis in China’s property market are likely to continue for the iron ore market for the foreseeable future as the industry grapples with debt and sluggish demand.”: ANZ
• Cash ACGBs are flat to 2bps cheaper.
• Swap rates are flat to 2bps higher, with the 3s10s curve steeper.
• The bills strip is little changed.
• 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 the RBA Minutes of the Feb. Policy Meeting, ahead of the Wage Price Index (WPI) on Wednesday.
• The Q4 WPI is expected to rise 0.9% q/q with the annual rate rising to 4.1% y/y up from 4.0% in Q3. The RBA said in its February meeting statement that it didn’t expect wage growth “to increase much further” and that it “remains consistent with the inflation target” assuming productivity growth improves.