STIR: RBA Dated OIS Mid-2026 Pricing 25bps Softer Than Pre-RBA Levels

This week March filled jobs and the April ANZ business survey are released. Given most hard data are quarterly, both will be monitored to gauge how the economy is faring following 200bp of monetary easing. The next RBNZ decision is on May 28 and another 25bp rate cut is likely as growth remains subdued.

• March filled jobs print on Tuesday and while they appear to have stopped contracting, they have remained weak in Q1 with January +0.1% m/m and February flat. Q1 labour market data are released on May 7.
• ANZ’s business survey for April is out on Wednesday. Q1 average business confidence and activity outlook moderated from Q4 signalling that the recovery remains gradual. The price/cost components though trended higher in the quarter with pricing intentions rising 5 points in March to its highest in almost two years. These elements of the survey are likely to be watched closely.
• Thursday sees April CoreLogic home values, which have begun to show that the housing sector is recovering. March building permits print on Friday, which remain weak but signalling some tentative signs of improving. 

In Tokyo morning trade, JGB futures are slightly stronger, +6 compared to settlement levels.

• With the domestic calendar empty ahead of tomorrow's holiday and Thursday's BoJ Policy Decision, the local market is on headlines and US tsys watch.
• (MNI) The Bank of Japan board is expected to keep its 0.5% policy interest rate unchanged at the two-day meeting ending May 1, as policymakers monitor the economic and inflationary impact of recent U.S. trade policies and volatile markets.
• Bank economists will also assess the potential downside risks to the economy and how they might affect inflation, using the most recent data available ahead of the meeting. This analysis will help shape the most likely economic scenario and inform the quarterly Outlook Report forecasts published alongside the rate decision.
• Cash US tsys are 1-2bps cheaper, with a flattening bias, in today’s Asia-Pac session after Friday’s solid gains.
• Cash JGBs are flat to 1bp richer out to the 30-year across benchmarks and ~1bp cheaper beyond. The benchmark 10-year yield is 1.1bps lower at 1.331% versus the cycle high of 1.596%.
• Swap rates are little changed. Swap spreads are mixed.

SELL 3020 of TYM5 traded at 111-19+, post-time 01:36:55 BST (DV01 $193,162). The contract is currently trading at 111-18+, 0-02+ from closing levels.