Slightly Weaker Ahead of Jobs Data

ACGBs are slightly weaker (YM flat & XM -1.0) despite US Tsys closing firmer in NY trade. Headline CPI moderated more than anticipated, but core inflation proved to be more resilient. US Tsys initially strengthened on the headline CPI print with the 2-year 19bp richer at one stage. Tsys came under pressure as 10-year supply tailed but firmed later in the session when FOMC Minutes showed that officials debated a temporary pause to rate hikes as the banking sector concerns raged. After the bell, 2-year and 10-year yields were respectively 6bp and 4bp lower.

• Cash ACGBs are flat to 1bp cheaper with the AU-US 10-year yield differential +3bp at -14bp.
• Swap rates open 1-2bp higher with EFPs 1bp wider.
• Bills strip pricing is 1-2 cheaper.
• RBA dated OIS opens little changed. A 22% chance of a 25bp hike in May is priced.
• The March Employment Report is slated for release today with BBG consensus expecting +20k and an unemployment rate of 3.6% up from 3.5%.
• Late in the Sydney session yesterday, RBA Deputy Governor Bullock stated that the policy pause in April was about trying to preserve jobs and accounting for policy lags rather than a response to banking turmoil.