Cheaper, Stronger Philly Fed & Fed Speak Weigh On US Tsys

ACGBs (YM -2.0 & XM -5.0) are cheaper as US tsy yields push higher after a stronger Philly Fed survey and hawkish Fed-speak. US 2-, 5- and 10-year tsys cheapened 5-6bps, with yields finishing at 4.99%, 4.68% and 4.63% respectively.

• The headline index of the Philly Fed survey jumped to a two-year high of 15.5 in April, with strength in new orders and shipments. Prices paid rose to a four-month high of 23.0 from 3.7.
• Jobless claims remained subdued, consistent with a healthy job market.
• Fed Williams’ comment on the potential for a data-driven rate hike in the future weighed on the market.
• Fed Bostic stated he doesn’t think it will be appropriate to lower borrowing costs until toward the end of the year.
• Later today, Chicago Fed Goolsbee will participate in a moderated Q&A at a SABEW conference ahead of the Fed blackout late Friday.
• Cash ACGBs are 2-5bps cheaper, with the AU-US 10-year yield differential 2bps lower at -30bps.
• Swap rates are 2-5bps higher, with the 3s10s curve steeper.
• The bills strip has bear-steepened, with pricing flat to -4.
• RBA-dated OIS pricing is 2-3bps firmer for meetings beyond September. A cumulative 15bps of easing is priced by year-end.
• Today, the local calendar is empty. The next key release is Wednesday’s Q1 CPI.