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Slightly Richer After CPI Monthly Miss

AUSSIE BONDS

ACGBs (YM -1.0 & XM flat) are 2bps richer after February’s CPI Monthly printed 3.4% y/y versus expectations of 3.5%. The forecast range was 3.3% to 3.8%.

  • Cash ACGBs are 2bps richer after the data and flat on the day. The 3/10 curve is little changed, with the AU-US 10-year yield differential 2bps lower at -21bps.
  • Swap rates are 2bps lower after the data and flat on the day.
  • The bills strip is still slightly cheaper, with pricing flat to -2.
  • RBA-dated OIS pricing is slightly softer after the data. A cumulative 38bps of easing is still priced by year-end.

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