Off Cheaps, Printing A Little Firmer On The Day

Tsys tick away from RBA-related session cheaps (which came as the Bank delivered a 25bp rate hike that surprised most), running 1.0-2.5bp richer across the cash curve, with the front end lagging. Meanwhile TYM3 operates just off the peak of its 0-06+ range.

• Early price action on Tuesday will largely be dictated by the European reaction to news flow that took place over the elongated weekend observed across most of Europe. This was centred on the J.P.Morgan purchase of most of First Republic, the aforementioned move from the RBA, softer than expected Chinese official PMI data, increased U.S. debt ceiling worry as Tsy Secretary Yellen pointed to the potential for the ‘X-date’ to fall as early as 1 June and a firmer than expected prices paid component in the latest ISM m’fing survey.
• Final manufacturing PMIs and flash CPI out of Europe present the headline date releases in the European morning, elsewhere, the ECB’s bank lending survey is set to get more interest than usual, given the well-documented tumult for the sector.