Weaker, Tight Range, RBA Minutes Tomorrow

With the local calendar light and US Tsys unchanged in Asia-Pac trade, ACGBs sit cheaper (YM -7.0 & XM -5.5) on the day but off session cheaps. US Tsys closed weaker ahead of the weekend after economic data beat expectations and large bank earnings came in better than expected. Hawkish comments from the Fed’s Waller and a surprise jump in near-term UoM inflation expectations also added additional pressure later in NY trade.

• Treasurer Chalmers, on the newswires, said he plans to release the results of the RBA Review next week and that some of the recommendations will require changes to legislation. He also said he had recently received a review of the Petroleum Resource Rent Tax.
• Cash ACGBs are 5-6bp cheaper with the AU-US 10-year yield differential -2bp at -13bp.
• Swap rates are 6bp higher across the curve.
• The bills strip is steeper with pricing -2 to -10.
• RBA dated OIS is 2-6bp firmer for meetings beyond June with Feb-24 leading. May meeting has a 28% chance of a 25bp hike with a cumulative 12bp of tightening priced by August. Year-end easing expectations are at 12bp.
• The local calendar is light this week with the RBA Minutes for April tomorrow as the highlight.