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AUSSIE BONDS: Slightly Cheaper With Cash US Tsys Out, Jun-31 Supply Due

AUSSIE BONDS
BulletAPACFixed Income BulletsAustraliaMarkets

ACGBs (YM -1.0 & XM -0.5) are slightly weaker. 

  • With US markets closed, the main move came in European bond markets amid a French political crisis as Prime Minister Michel Barnier struggles to secure approval for next year’s budget. France’s 10-year yield rose above Greece for the first time, although it closed 2bps lower.
  • However, European bond markets were supported by some dovish-leaning comments by the ECB’s Villeroy de Galhau. He said there won’t be any reason monetary policy will remain restrictive, with inflation at 2% and a sluggish growth outlook.
  • “Reserve Bank governor Michele Bullock says Australia could be a beneficiary of Donald Trump’s tariffs on Mexico, Canada and China, if affected firms divert their products to Australia and cause prices to fall. “ (See link)
  • Cash ACGBs areflat to 1bp cheaper.
  • Swap rates are flat to 1bp higher with the 3s10s curve flatter.
  • The bills strip is cheaper with pricing -1 to -3.
  • RBA-dated OIS pricing is flat to 2bps firmer. A 25bp rate cut is not fully priced until May.
  • Today, the local calendar will see Private Sector Credit alongside AOFM’s planned sale of A$700mn of the 1.50% 21 June 2031 bond. 
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ACGBs (YM -1.0 & XM -0.5) are slightly weaker. 

  • With US markets closed, the main move came in European bond markets amid a French political crisis as Prime Minister Michel Barnier struggles to secure approval for next year’s budget. France’s 10-year yield rose above Greece for the first time, although it closed 2bps lower.
  • However, European bond markets were supported by some dovish-leaning comments by the ECB’s Villeroy de Galhau. He said there won’t be any reason monetary policy will remain restrictive, with inflation at 2% and a sluggish growth outlook.
  • “Reserve Bank governor Michele Bullock says Australia could be a beneficiary of Donald Trump’s tariffs on Mexico, Canada and China, if affected firms divert their products to Australia and cause prices to fall. “ (See link)
  • Cash ACGBs areflat to 1bp cheaper.
  • Swap rates are flat to 1bp higher with the 3s10s curve flatter.
  • The bills strip is cheaper with pricing -1 to -3.
  • RBA-dated OIS pricing is flat to 2bps firmer. A 25bp rate cut is not fully priced until May.
  • Today, the local calendar will see Private Sector Credit alongside AOFM’s planned sale of A$700mn of the 1.50% 21 June 2031 bond.