Cheaper, Underperforming US Tsys

ACGBs (YM -4.0 & XM -2.5) are cheaper after a typical NY summer session for US tsys, with little newsflow to drive markets. The front end outperformed after cooler existing home sales and strong demand at the 2-year note auction.

• US existing home sales were weaker than expected, down 5.4% m/m in June, the fourth successive monthly decline.
• The 2-year US tsy was 3bps richer at 4.49%, with the 10-year unchanged at 4.25%. The curve steepened to -24bps from -27bps.
• US equity indices were slightly lower at the end of the NY session. However, after the closing bell, Tesla reported earnings per share of US52¢ v expectations of US60¢. Its shares were down more than 4% soon after. Alphabet reported slightly better than expected profit and revenue for the quarter. Its stock edged higher. (as per AFR)
• Preliminary Judo Bank PMIs printed for July: Mfg rises to 47.4 from 47.2 in June; Services falls to 50.8 from 51.2 in June; and Composite falls to 50.2 from 50.7 in June.
• Cash ACGBs are 2-3bps cheaper, with the AU-US 10-year yield differential at +12bps.
• Swap rates are 2-3bps higher.
• The bill strip pricing is -1 to -2.
• RBA-dated OIS pricing is slightly firmer. Terminal rate expectations sit at 4.43%.