Slightly Mixed, RBA Minutes Have Minimal Impact, Wages Data Tomorrow

ACGBs (YM +1.0 & XM -1.0) are mixed after the release of the RBA Minutes for the February meeting.

• The RBA Board discussed leaving rates at 4.35% and a 25bp increase but decided on the former as it best balanced its objectives of price stability and full employment.
• However, the tightening bias was retained given that inflation was still high and it would take time for it to feel confident inflation was returning to target.
• The Board is prepared to respond to the data, risks and changes in the outlook but the minutes suggest that for now, it is on hold.
• US tsys are dealing flat to 2bps cheaper in today’s Asia-PAC session.
• Cash ACGB movements are bounded by +/- 1bp, with the curve steeper.
• Swap rates are -1bp lower to 1bp higher.
• Bills strip pricing is flat to +2.
• RBA-dated OIS pricing is little changed across meetings.
• Tomorrow, the local calendar sees the Wage Price Index (WPI). The Q4 WPI is expected to rise 0.9% q/q with the annual rate rising to 4.1% y/y from 4.0% in Q3. The RBA said in its February meeting statement that the WPI “remains consistent with the inflation target” assuming productivity growth improves.
• Tomorrow, the AOFM plans to sell A$800mn of 3.75% Apr-37 bond.