Richer, Narrow Range, Journalists Are In The Hawks Nest

In futures roll-impacted trading, ACGBs are richer (YM +4.8 & XM +6.7) after trading in a narrow range in the Sydney session. With the local calendar light today, local participants have likely been monitoring US tsys, which are 0.7-1.5bp cheaper in Asia-Pac trade.

• Cash ACGBs are 5-7bp richer with the AU-US 10-year yield differential +2bp at +22bp.
• Swap rates are 7-8bp lower with EFPs little changed.
• The bills strip is flatter with pricing +2 to +9.
• RBA dated OIS are 1-4bp softer across meetings with an expected terminal rate of 4.46%.
• James Glynn (Dow Jones) - It is looking more likely that the answer to Australia's stubborn inflation woes will be the onset of a recession. (link)
• Christopher Joye writes an AFR article titled “Why the cash rate could hit 5pc before the RBA is done”. (link)
• Note that Monday is a public holiday for most parts of Australia. The next key data is on Tuesday with the release of Westpac Consumer Confidence (June) and NAB Business Confidence (May). Next week’s highlight undoubtedly will be the May Employment Report on Thursday.
• The AOFM announced there will be no conventional bond tenders next week. They do plan to sell A$150mn of the 0.25% Nov-32 index-linked bond on Tuesday, 13 June.