Cheaper Ahead Of RBA Minutes

ACGBs are cheaper (YM -6.0 & XM -8.0) in line with the weakening in US tsy futures. Cash tsys were closed yesterday for the observance of the Juneteenth holiday.

• US tsy futures weakened, mirroring the performance of UK and European bonds. The 2-year Gilt yield was 14bp higher ahead of the BoE policy decision on Thursday. Consensus expects another strong UK CPI print (Wed) and a hawkish 25bp hike from the BoE.
• Cash ACGBs opened 6-8bp cheaper.
• Swap rates opened 6-8bp higher with the 3s10s curve steeper.
• The bills strip bear steepens with pricing -3 to -9.
• RBA dated OIS pricing opened 2-5bp firmer for meetings beyond October.
• The focal point of the day lies in the release of the June RBA Meeting Minutes, wherein the Board surprisingly raised the cash rate by an additional 25bp, bringing the cash rate target to 4.1%. Following the meeting, Governor Lowe delivered a speech accompanied by a Q&A session, addressing some of the RBA's current concerns regarding the economic outlook. The release of the Minutes may provide further insights into the RBA's thought process.
• RBA Deputy Governor Bullock (1330 AEST) and RBA Assistant Governor Kent (1135 AEST) are also slated to speak today.