Richer, US Tsys Look Past Better Than Expected Retail Sales

ACGBs (YM +4.0 & XM +4.5) are richer after another strong NY session for US tsys. US tsys finished near session bests with the long-end out-performing. The US 10-year yield finished 7bps lower at 4.16% versus a 4bp drop for the US 2-year to 4.42%. This came after an early session sell-off following stronger-than-expected Retail Sales data.

• US equities strengthened with the rally broadening out. Bloomberg reported since late last week the surge in the Russell 2000 has bested the NASDAQ 100 by 12%, the most since 2011.
• Cash ACGBs are 4-5bps richer, with the AU-US 10-year yield differential at +4bps.
• Swap rates are 6bps lower.
• The bills strip has bull-flattened, with pricing +1 to +7.
• RBA-dated OIS pricing is 3-6bps softer across meetings. Terminal rate expectations sit at 4.39%.
• Today, the local calendar will see the Westpac Leading Index.
• The AOFM plans to sell A$500mn of the 3.00% 21 November 2033 bond today. A sale of A$700mn of the 2.75% 21 November 2027 bond is also scheduled for Friday.
• TCorp has announced its intention to auction A$600 million of its existing 2% March 20 2031, 2% March 8 2033 and 4.75% Feb. 20 2035 benchmark bonds. Bids will be accepted via Yieldbroker on an exchange for a physical basis from 10:15 am to 10:30 am Sydney trading time, July 17.