ACGBs are cheaper (YM -7.0 & XM -7.5) ahead of today’s RBA Policy Decision. US tsys yields were sharply higher in NY trade after the April ISM Manufacturing Prices Paid component surpassed anticipated values, registering 53.0 compared to the expected 49.0. Additionally, Bloomberg reported that JP Morgan has reached an agreement to acquire First Republic Bank in a government-assisted deal, with JP Morgan and the FDIC agreeing to jointly absorb any losses incurred.

• Cash ACGBs opened 6-8bp cheaper with the AU-US 10-year yield differential -3bp at -14bp.
• Swap rates opened 5-8bp higher with the 3s10s curve 3bp steeper.
• The bills strip is steeper with pricing -3 to -6.
• The RBA is expected to remain on hold at its policy decision meeting today (0530 BST), taking advantage of the Q1 core CPI undershoot to assess the impact of the 350bp of tightening that has been delivered. The focus is likely to be on the tone of the statement.
• RBA Governor Lowe is scheduled to deliver a speech at 1220 BST.
• RBA dated OIS opened 1-6bp firmer across meetings with an 11% chance of a 25bp hike priced for today's meeting. Terminal rate expectations (August) opened 3bp firmer at 3.73% for a cumulative tightening of 16bp.