Steady After Yesterday’s Post-RBA Rally, US Tsys Richer Ahead Of FOMC

ACGBs (YM flat & XM flat) are little changed overnight after yesterday’s post-RBA Decision rally. This is despite a bull-steepening by US tsys ahead of today’s FOMC Decision. US tsys finished the NY session, with yields 1-5bps lower.

• Tuesday’s drivers were initially some European spillover before, more notably, a miss for Canadian CPI and then the first stop for a 20Y auction since Nov. Auction details included a solid 2bp trade through along with the highest bid-to-cover since Jun and lowest dealer take since Sep.
• US Building Permits and Housing Starts for February exceeded median expectations, but partly weather-related.
• There will be no cash US tsy dealings in Asia today, with Japan out for a public holiday.
• The S&P 500 rose 0.6%, while Bitcoin traded below $US64,000, a drop of more than 10% since setting its record high last week.
• Cash ACGBs are unchanged, with the AU-US 10-year yield differential 3bps higher at -21bps.
• Swap rates are little changed.
• The bills strip is slightly cheaper, with pricing flat to -1.
• RBA-dated OIS pricing is little changed. A cumulative 39bps of easing is priced by year-end.
• Today, the local calendar the local calendar is empty apart from the sale of A$800 million of the 2.75% Jun-35 bond.