Cheaper, US Tsys Weighed Down By Corporate Issuance

ACGBs are weaker (YM -5.0 & XM -6.5) due to pressure on US Tsys from rate-locking activity related to heavy corporate issuance weighed on the market. Additionally, the NY Fed's latest quarterly loans officers survey revealed that banks had tightened lending standards during Q1.

• Cash ACGBs opened 4-6bp cheaper with the AU-US 10-year yield differential at -4bp.
• Swap rates opened 4-7bp higher with the 3s10s curve 3bp steeper.
• The bills strip is steeper with pricing -1 to -7.
• RBA dated OIS opened 1-4bp firmer for meetings beyond October with early'24 leading.
• The Federal Budget is scheduled for release today with BBG consensus expecting a A$5.35bn deficit, equivalent to 0.25% of GDP for FY23. As part of the budget announcement, the Treasurer is expected to unveil a range of policy initiatives to balance fiscal restraint with support for the most vulnerable members of society. These initiatives may include tax reforms, program changes, and household relief measures. If it turns out to be significantly expansionary, then RBA rate expectations may be affected.
• Today also sees the release of April's CBA Household Spending, May's Westpac Consumer Confidence, and Q1 Real Retail Sales data.
• The AOFM plans to sell A$150mn of the 0.75% 21 Nov 2027 Index Linked bond.