Cheaper, Heavy Weekly Calendar With Minutes, Wages & Jobs

ACGBs are weaker (YM -7.0 & XM -7.0) with US tsys bear flattening in trading ahead of the weekend. After the bell on Friday, cash tsys were 5-9bp cheaper across benchmarks. UofM’s confidence fell but 5-10 years inflation expectations rose to a 12-year high of 3.2%.

• Cash ACGBs opened 7bp cheaper with the AU-US 10-year yield differential at -7bp.
• Swap rates opened 7-8bp higher.
• The bills strip has bear steepened with pricing -3 to -7.
• RBA dated OIS opened 2-7bp firmer across meetings beyond September with a 12% chance of a 25bp hike priced for June.
• The local calendar is light today ahead of the RBA Minutes for May tomorrow, Q1 Wage Price Index on Wednesday, and the April Employment Report on Thursday. The WPI surprised on the downside in Q4, while March employment surprised on the upside with an increase of 53k jobs and an unemployment rate of 3.5%.
• Treasurer Chalmers, on ABC TV on Sunday, called tax relief for some earners a “worthy objective”, amid criticism that planned income tax cuts next year could further fuel inflation.
• An AFR survey found 51% of readers labelled the budget “good” or “very good”, compared with 48% following the October budget.