Stronger with U.S. Tsys After Yellen 2.0

ACGBs are richer (YM +3.0 & XM +1.5) after U.S. Tsys move higher, partially tied to the sell-off in bank stocks and safe haven flows as Tsy Secretary Yellen attempted to soften her comments on deposit insurance. Yellen stated that she was prepared for additional deposit actions, if warranted, after saying in Wednesday’s testimony that Tsy was “not considering” such action. By the bell, U.S. Tsys had extended their post-FOMC decision rally with the 2-year yield declining 14bp to 3.80% and the 10-year declining 3bp to 3.4%. Also, overnight the Bank of England and the Swiss National hiked interest rates respectively 25bp and 50bp.

• Cash ACGBs open 2-3bp stronger with the 3/10 curve 1bp steeper and the AU-US 10-year yield differential unchanged at -15bp.
• Swaps open 1-3bp richer with the 3s10s curve 2bp steeper and 3-year EFP slightly wider.
• Bills strip richens 1-8bp led by the whites.
• RBA dated OIS opens 1-3bp softer across meetings with 28bp of easing priced by year-end. April meeting pricing is at +3bp.
• The local calendar is light today with Judo Bank PMI being the first of the global roll-out of flash PMIs. Japan CPI is also slated for release today.
• The AOFM is slated to sell today A$500mn of the 4.25% 21 April 2026 bond.