PRECIOUS METALS: Silver - Looking To Accelerate Higher, Lease Rates Spike

At the time of writing, RBA-dated OIS pricing is slightly firmer on the day across meetings ahead of today’s RBA Policy Decision. 

• A 25bp rate cut this week is given a 97% probability, with a cumulative 59bps of easing priced by year-end (based on an effective cash rate of 3.84%).

Figure 1: RBA-Dated OIS – Current Vs. Yesterday

Source: Bloomberg Finance LP / MNI 

At the Tokyo lunch break, JGB futures are weaker but off lows, -8 compared to the settlement levels.

• Cash US tsys are little changed in today's Asia-Pac session ahead of today's US CPI data.
• (Bloomberg) "Markets remain skeptical that the Bank of Japan will raise rates soon, even as inflation proves sticky. Economists pencil in one hike by year-end, but with the GDP deflator likely to exceed 3%, homegrown inflation is showing signs of entrenchment, adding to the urgency to tighten policy."
• Cash JGBs are showing a modest sell-off across benchmarks, led by the 4-year. The benchmark 10-year yield is 0.4bp higher at 1.495% versus the cycle high of 1.616%.
• Swap rates are little changed. Swap spreads are mixed.

The benchmark Shanghai Composite Index hit a new high this year, reaching an intra-day peak of 3,650 on Monday, China Securities Journal reported. The turnover in the A-share market exceeded CNY1.8 trillion, with over 4,100 stocks rising and over 80 of them hit the day limit, the newspaper said.