Richer, Off Bests, CPI Monthly & RBA Lowe's Testimony Tomorrow

ACGBs sit slightly stronger (YM +2.0 & XM +2.5) but well off Sydney session bests as cash tsys give up some of their early gains in Asia-Pac trade.

• After the Memorial Day holiday, the cash tsy curve has twist flattened with yields lower beyond the 2-year. Among the benchmarks, the standout performer has been the 20-year, which has witnessed a 5.4bp decline, currently yielding at 4.086%.
• Cash ACGBs are 3bp richer with the AU-US 10-year yield differential at -9bp.
• Swap rates are 2-3bp lower with EFPs little changed.
• The bills strip has twist flattened with pricing -2 to +4.
• RBA-dated OIS pricing is 1-3bp softer for meetings beyond September.
• Building approvals fell 8.1% m/m (estimate +2.0%) in April versus revised -1.0% in March. “Total dwellings approved fell to the lowest level since April 2012”, according to the ABS.
• Tomorrow's schedule presents the week's: RBA Governor Lowe's testimony to parliament and the release of April CPI monthly data. Bloomberg consensus expects the annual rate to show a slight increase to 6.4%, with a range of 6.1% to 6.6%, compared to 6.3% in March.
• The local calendar also releases Construction Work Done (Q1), Private Sector Credit (April), and CoreLogic House Prices (May).
• The AOFM plans to sell A$300mn of the 1.75% 21 June 2051 bond tomorrow.