Slightly Richer, US Tsys Supported By Friendly Data & Regional Bank Concerns

ACGBs (YM +1.0 & XM +3.5) are slightly richer after US tsys extended their post-FOMC rally following friendly economic data and regional banking concerns. Initial Jobless Claims unexpectedly rose by 9k last week to 224k.

• In Q4, nonfarm productivity growth exceeded expectations, showing a robust annualised increase of 3.2%. Consequently, unit labour costs, at an annualised rate of 0.5%, turned out to be weaker than anticipated. This marks the second consecutive quarter of subdued performance in unit labour costs.
• The KBW Regional Banking Index closed down ~2%, but off the midday low (-5%), driven by concerns over NY regional banks after New York Community Bancorp (purchaser of collapsed Signature Bank shares) fell over 40% yesterday and as much as 14% on Thursday.
• In other developments, the BoE maintained its policy rate at 5.25% following a 6-3 decision, indicating a persistent division within the MPC. Notably, two MPC members advocated for a 25bp hike, while one member persisted in advocating for a 25bp cut.
• Cash ACGBs are 2-3bps richer, with the AU-US 10-year yield differential 4bps wider at +10bps.
• Swap rates are 2-3bps lower.
• The bills strip is flat to +1.
• RBA-dated OIS pricing is little changed.
• Today, the local calendar will see PPI and Home Loans data.
• The AOFM also plans to sell A$800mn of May-34 bond.