Stronger But Well Off Post-FOMC Bests

ACGBs closed richer (YM +8.0 & XM +7.5) but off session extremes as the U.S. Tsy curve twist steepened in Asia-Pac trade following the FOMC policy decision. At the Sydney close, the 2-year U.S. Tsy yield was 6bp lower and the 10-year 1bp higher. Cash ACGBs closed 8bp richer on the day with the 3/10 curve unchanged and the AU/US 10-year yield differential is +7bp at -15bp.

• Swaps closed 9-10bp stronger but similarly off Asia-Pac session extremes with the 3s10s curve unchanged and EFPs 1-2bp tighter.
• Bills strip flattened with pricing flat to +14.
• RBA dated OIS closed flat to 2bp firmer for meetings out to September and 3-7bp softer beyond. April meeting pricing firmed to an 11% chance of a 25bp hike. Year-end easing expectations closed at 26bp versus 34bp earlier in the session.
• The local calendar is light until next week when February retail sales (Tue) and monthly CPI (Wed) are scheduled for release. These two releases were highlighted in the RBA Minutes as important inputs to the April policy decision.
• Until then, the market will continue to track U.S. Tsys in the wake of yesterday's FOMC decision. The U.S. calendar is light today with U.S. Home Sales and Claims data as the highlights.