MNI China Daily Summary: Monday, July 1

MNI BRIEF: PBOC To Borrow CGBs In Response To Market Situation

MNI BRIEF: Caixin June Manufacturing PMI Hits Three-year High

MNI: PBOC Net Drains CNY48 Bln Via OMO Mon; Rates Unchanged

CHINA PBOC CONDUCTS CNY2 BILLION VIA 7-DAY REVERSE REPOS MON

EZ/UK Bond Supply Calendar: UK, Germany Auction on Tuesday

EZ/UK T-Bill Calendar: Spain, Belgium, ESM Auction on Wednesday

MNI: US MAY CONSTRUCT SPENDING -0.1%

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

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Holding Cheaper Into Year-End, Light Calendar Again Next Week

AUSSIE BONDS

ACGBs (YM -4.0 & XM -6.5) are holding cheaper on the final trading session of 2023 after dealing in relatively narrow ranges. With the local calendar empty, local participants have likely been eyeing US tsys in today’s Asia-Pac session as the year of trading comes to an end.

  • US tsys are currently dealing flat to 1 bp richer across benchmarks versus NY closing levels.
  • Cash ACGBs are 4-6 bps cheaper, with the 3/10 curve steeper and the AU-US 10-year yield differential 2 bps wider at +12 bps.
  • Swap rates are 3-5 bps higher, with EFPs little changed.
  • The bill strip is cheaper, with pricing from -1 to -4. Mid-reds are the weakest.
  • RBA-dated OIS pricing is dealing mixed, but the moves remain small across meetings.
  • (AFR) Global fund managers have slashed their cash holdings to a two-year low and are betting that technology stocks and bonds will be the biggest winners when the Federal Reserve pivots to rate cuts. (See link)
  • Next week, the local calendar is relatively light with CoreLogic House Prices and Judo Bank PMI Mfg on Tuesday and Judo Bank PMI Composite & Services on Thursday.
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