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

JGB futures sit at Tokyo session lows, -3 compared to settlement levels, after local participants faded strength seen in overnight trade ahead of the weekend. Assisting the move lower over the Tokyo session has been a cheapening in US tsys in Asia-Pac trade.

• Consumer Confidence for April, just released, surprised on the upside with a print of 35.4 versus expectations of 34.5 and 33.9 in March. The data however failed to generate a significant immediate market reaction.
• JBM3 currently sits at 148.57, sandwiched between the April trading range's top at 147.92 and the March 22 high at 149.53. Technical analysis from MNI suggests that breaking the March 22 high would signal the continuation of the uptrend.
• Cash JGBs are trading mixed across the curve, with the 4-5-year zone outperforming. Benchmark yields are 0.4bp lower to 4.2bp higher, with the 30-40-year zone experiencing the weakest performance. The benchmark 10-year yield is 0.3bp higher at 0.397%, well below BoJ's YCC limit of 0.50%.
• The swaps curve has bear steepened with rates 0.2-5.6bp higher. Swap spreads are wider across the curve.
• The local calendar is light tomorrow with Monetary Base data for April as the highlight.
• A Liquidity Enhancement Auction For OTR 1-5 Year JGBs is scheduled for tomorrow.

ACGBs sit slightly weaker (YM -1.0 & XM -1.0) after early gains inspired by US tsys strength ahead of the weekend are more than reversed over the Sydney session. With little meaningful macro news flow, the local market has traded with US tsys, which have cheapened in Asia-Pac trade, ahead of tomorrow’s RBA policy decision.

• The RBA is expected to remain on hold at its policy decision meeting tomorrow, taking advantage of the Q1 core CPI undershoot to assess the impact of the 350bp of tightening that has been delivered.
• RBA dated OIS is currently attaching a 12% chance of a 25bp hike versus 36% ahead of Q1 CPI data. Terminal rate expectations, which have centred on the August meeting, have also been scaled back with current pricing at 3.70%, 13bp of cumulative tightening.
• Cash ACGBs are flat to 1bp cheaper with the AU/US 10-year yield differential +3bp at -11bp.
• Swap rates are 1-2bp higher with EFPs slightly wider.
• Bills strip pricing is -2 to +1 with mid-reds the strongest.
• RBA Governor Lowe is scheduled to deliver a speech (1220 BST) after tomorrow’s decision.
• Until the RBA Decision, the local market will be watching US tsys through the release of US ISM Manufacturing PMI later today.