Little Changed, Subdued Session

ACGBs (YM flat & XM +1.5) are slightly richer after dealing in narrow ranges in today’s Sydney session.

• Westpac's consumer sentiment reading rose in June, but the local bank notes that it is still well below neutral levels.
• Two topics stood out in June: ‘budget & tax’ and ‘inflation’, with nearly half of consumers recalling news on each of these. On the former, the news was viewed as less unfavourable than in March, reflecting the well-received Commonwealth budget, the cost-of-living measures delivered by both Federal and state governments, and the stage 3 tax cuts set to commence on July 1. However, the news on inflation was viewed as less favourable than in March, with assessments retracing most of the way back to the levels seen in December when the RBA had just raised the cash rate in response to persistently high inflation.
• Cash ACGBs are flat to 1bp richer, with the AU-US 10-year yield differential at -3bps.
• Swap rates are 1bp lower.
• The bills strip is little changed.
• RBA-dated OIS pricing is little changed. A cumulative 14bps of easing is priced by year-end from an expected terminal rate of 3.37%.