Stronger But Off Bests As Minutes Impetus Fades

ACGBs close richer (YM +2.0 & XM +5.0) in line with stronger U.S Tsy futures but off bests as the RBA Minutes failed to provide a fresh impetus for the market.

• The Minutes suggested the Board was considering the case for a pause while recognizing that further tightening of monetary policy would likely be required to reign in inflation. An emphasis was placed on the data releases ahead of the April meeting, but that pre-dated recent adverse credit developments.
• Cash ACGBs closed 2-5bp richer with the 3/10 curve 3bp flatter.
• Swaps were 1-5bp stronger with the curve 4bp flatter and EFPs +1bp.
• Bills strip twist flattened with pricing -3 to +4.
• RBA dated OIS pricing closed mixed with meetings out to July 3-4bp firmer and meetings beyond flat. April meeting closes at -2bp with 40bp of easing priced for year-end.
• The local calendar is light until next week’s releases of February Retail Sales (Tue) and Monthly CPI (Wed). Both releases were highlighted in today’s RBA Minutes as key to the April decision.
• Abroad, the calendar is also relatively light today, with Philly Fed and U.S. Existing Home Sales the highlights, ahead of the FOMC decision on Wednesday. BBG consensus expects a 25bp hike, although some analysts expect no move.