Little Changed, Modest Gains For US Tsys, Nvidia Rout Continued

ACGBs (YM -1.0 & XM +0.5) are little changed after US tsys posted modest gains overnight.

• US equities finished mixed. The Dow was higher, the S&P 500 slipped 0.3% while the Nasdaq dropped 1% led by Nvidia. Nvidia tumbled ~7% to be 13% lower over the past three sessions.
• Cash ACGBs are flat to 1bp richer, with the AU-US 10-year yield differential at -2bps.
• Swap rates are flat to 1bp lower.
• The bills strip is little changed.
• RBA-dated OIS pricing is little changed. A cumulative 13bps of easing is priced by year-end from an expected terminal rate of 3.37%.
• Today, the local calendar will see Westpac Consumer Confidence. The slightly more hawkish-sounding RBA on June 18 will likely keep sentiment weak and maybe even drive a further fall.
• However, the focus will be on May’s CPI Monthly tomorrow. The May CPI is expected to post an increase of 3.8% y/y up from 3.6% the previous month. Forecasts range from 3.5% to 4.0% with most around 3.7-3.8%. April did not include a comprehensive update of the services components, but May will. Housing costs, insurance, electricity prices and personal services are likely to rise.
• RBA Assistant Governor Kent will speak tomorrow at 0935 AEST and Deputy Governor Hauser on Thursday at 2000 AEST.