Weaker, US Tsy Cheaper After Data and Bank Earnings

ACGBs are cheaper (YM -9.0 & XM -8.5) as US Tsys yields closed higher in NY trade ahead of the weekend. Stronger-than-expected data (core retail sales and industrial production) and better-than-expected earnings from big banks supported the move. After the bell, US Tsy 2-year and 10-year yields were respectively 13bp and 7bp higher.

• Cash ACGBs opened 8bp weaker with the AU-US 10-year yield differential at -11bp.
• Swap rates opened 8bp higher.
• Bills strip bear steepens with pricing -4 to -14.
• RBA dated OIS opened 3-8bp firmer for meetings beyond June with Feb-24 leading.
• The local calendar is light this week with the RBA Minutes for April tomorrow as the highlight. After the RBA left the cash rate unchanged at 3.6% (the first pause in this tightening cycle) the market will be searching for clues on the near-term path of policy.
• Treasurer Chalmers, on Bloomberg TV, said he plans to release the results of the RBA Review in the next week or two.
• Participants will be on the lookout for the launch of the new ACGB Dec-34 after the AOFM revealed that it aims to issue the line via syndication at some point this week back on Friday.