Richer At Sydney Session Highs, Weak Domestic Data & Stronger US Tsys

ACGBs (YM +5.0 & XM +6.0) are richer at Sydney session highs. This move has been supported by disappointing domestic data, specifically in Building Approvals and Trade Balance, as well as an uptick in US tsys during today's Asia-Pacific session.

• Cash ACGBs are 6bps richer, with the AU-US 10-year yield differential 2bps higher at -15bps.
• Swap rates are 6bps lower.
• The bills strip has extended its bull-flattening post-data, with pricing flat to +6.
• RBA-dated OIS pricing is 2-7bps softer for meetings beyond September. The expected terminal rate sits at 4.41%.
• (AFR) Markets have pushed back the timing for the Reserve Bank of Australia’s first cash rate cut until after the next federal election, complicating Labor’s bid for a second term amid red-hot voter concern over the cost of living. (See link)
• The local calendar will see Judo Bank Composite & Services PMI and Home Loans data tomorrow. The RBA Policy Meeting Decision is due next Tuesday.
• Later today the US calendar will see the preliminary release for Q1 productivity. This will provide broader macro considerations of Tuesday’s higher-than-expected ECI. Strong productivity gains have offset labour costs in recent quarters but consensus sees productivity growth tailing off to 0.7% annualized in Q1.