March 14, 2023 21:59 GMT
Softer With U.S Tsys
Ahead of the March futures close midday AEST ACGBs are cheaper (YM -5.6 & XM -5.0) as the U.S Tsy curve was marked lower in NY trade. Little reaction to February CPI data which came in slightly higher but with core services ex OER accelerating. U.S Tsy 2-year yield was +26bp and the 10-year +10bp on the day but still respectively 85bp and 40bp below their peaks last week. Cash ACGBs open 4-5bp weaker with the 3/10 curve 1bp flatter. AU/US 10-year yield differential is 9bp wider at -21bp.
- A similar move for swaps with rates 4-5bp higher with EFPs unchanged.
- Bills strip bear flattens with pricing 3-8bp cheaper.
- In a significant development yesterday when RBA dated OIS priced an end to the tightening cycle with a 25bp easing by the RBA by end-23 priced at one stage. At the open pricing is 5-11bp firmer across meetings with April back pricing in a 20% chance of a 25bp hike.
- The local calendar is light today ahead of the all-important Employment Report tomorrow.
- Elsewhere, China is slated to announce the 1-year MT lending rate along with a raft of monthly (Jan/Feb) releases including Retail Sales and Industrial Production ahead of US PPI and Retail Sales for February tonight.