Weakness From Across The Tasman Applies Light Pressure, Alongside Swap Flow

Trans-Tasman spill over from the cheapening in NZGBs after the latest round of NZ government communique re: the RBNZ, coupled with the previously alluded to payside swap flow pressure (EFPs continue to hold wider), is adding weight to the ACGB complex ahead of the release of the RBA meeting minutes, leaving YM & XM -3.0, respectively. Wider cash ACGB trade sees 2-3bp of cheapening.

• Bills have extended their downtick, printing 3-7bp cheaper through the reds, while RBA-dated OIS shows terminal cash rate pricing of just below 4.30%, firming on the day.
• More focus is being placed on tomorrow’s Q4 WPI print than the RBA meeting minutes that will cross at the bottom of the hour, given the deluge of post-meeting commentary delivered by the Bank. Still, it will be worth looking into the minutes to observe the discussions around potential hike increments that took place at the Feb meeting (or if a pause was discussed at all).