LOOK AHEAD: UK Timeline of Key Events (Times BST)

After some initial volatility ACGBs sit 4-5bp richer post-RBA to be in the top of the session trading range at the time of writing (YM +9.0 & XM +6.5). While the RBA decision to leave the cash rate unchanged (for the first time since April 2022) was largely priced, the positive surprise for the market came via less hawkish guidance with the board stating that “some further tightening of policy may be needed”. The market will be tuned into the release of Q1 CPI on April 26 after the RBA board also signalled their belief that a range of data suggested inflation has peaked.

• Cash ACGBs are 3-5bp richer after the RBA decision to be 7-10bp stronger on the day.
• Swaps rates are 3-6bp lower post-RBA with the 3s10s curve steeper.
• Bills strip strengthens 5-8bp after the RBA decision with pricing +3 to +13 on the day with the whites leading.
• RBA-dated OIS pricing is 5-7bp softer across meetings after the RBA decision. The market had priced an 81% chance of a pause today ahead of the decision. May meeting pricing softened 5bp post-RBA, while year-end easing expectations remained unchanged at 23bp.

TYM3 deals at 115-18, +0-03+, with a 0-07+ range observed on volume of ~91k.

• Cash tsys sit little changed across the major benchmarks.
• Tsys pared losses after the RBA held the cash rate steady at 3.6%. The RBA board watered down previously hawkish forward guidance as the bank noted in the final paragraph that some further tightening "may" be needed, at the previous meeting the board had noted further tightening will be needed. A subsequent rally in ACGB spilled over.
• Earlier in the session after an initial muted start tsys were marginally pressured as the USD came off session lows and US equity futures and regional equities softened.
• Spillover from a poorly received 10 Year JGB auction saw losses extended a touch, a block seller of TY (3,240 lots) also weighed.
• Early today Fedspeak from Governor Cook noted that the disinflationary process is underway, but there is more work to do. She also noted that continuing tightness in the labour market is still producing an inflationary impulse.
• Eurozone PPI data headlines an otherwise thin European session. Further out we have Factory Orders and JOLTS Job Opening. Fedspeak from Fed Governor Cook will cross.