Richer, Thin Calendar Again, CPI Monthly Tomorrow

ACGBs are richer (YM +4.0 & XM +5.0) after US tsys hold modestly firmer after the NY bell. US tsys finished in the bottom half of the NY range as pre-2-year auction hedging and rate-locking ahead of upcoming corporate issuance weighed. The latest 2-year auction stopped through, a strong bid/cover and indirect take-up were observed.

• Cash ACGBs opened 4bp richer with the AU-US 10-year yield differential -2bp at +18bp.
• Swap rates opened 5bp lower.
• The bills strip bull flattens with pricing +2 to +8.
• RBA-dated OIS pricing is 2-7bp softer for meetings beyond July.
• The local calendar is light tomorrow with the weekly highlights being tomorrow's CPI Monthly and Thursday's Retail Sales releases.
• The data calendar is also light in Asia today. Further out we have a slew of US data including US new home sales, durable goods and Conference Board consumer confidence. We also have the latest 5-Year Supply.
• The highlight later today is however likely to be the release of Canada’s CPI with the market expecting a step-down in the annual core rate from 4.2% to 4.0%.
• The AOFM plans to sell today A$100mn of the 0.75% 21 November 2027 index-linked bond and A$50mn of the 1.25% 21 August 2040 index-linked bond.