Spike Richer on Israeli Strike Pared, Q1 CPI On Wednesday

ACGBs (YM +5.0 & XM +3.5) spiked higher after news broke that Israeli missiles had struck sites in Iran, according to ABC. The market initially reacted with a spike of up to 10 points from session lows. However, these gains have since been pared back.

• Cash US tsys are dealing 6-9bps richer across benchmarks, although they have retraced from the peak levels seen during the Asia-Pacific session.
• The Middle East tension has dominated market moves, however, there have been some fed speakers with the Fed's Williams saying there is no urgency to cut rates. Fed Bostic spoke earlier this morning reiterating his view of just one cut this year (MNI - see link).
• Later today, Chicago Fed Goolsbee will participate in a moderated Q&A at a SABEW conference ahead of the Fed blackout late Friday.
• Swap rates are 3-5bps lower, with the 3s10s curve steeper.
• The bills strip has bull-flattened, with pricing +1 to +6.
• RBA-dated OIS pricing has reversed early weakness to be 3-4bps softer for 2025 meetings. A cumulative 20bps of easing is priced by year-end.
• Next week, the local calendar sees Judo Bank PMIs on Tuesday, ahead of Q1 CPI on Wednesday.
• On Monday, the AOFM plans to sell A$800mn of the 0.5% Sep-26 bond.