Richer With US Tsys Ahead Of Retail Sales

ACGBs are slightly richer (YM +3.0 & XM +3.0) after US tsy yields finished down 4-6bp across the curve, with the 10-year rate currently at 3.71%. German and UK 10-year yields were also down 4bp and 6bp respectively.

• During the ECB's annual conference in Portugal, the heads of the Fed, ECB, BoE, and BoJ delivered speeches, but no new perspectives were shared. They echoed the recent policy updates, with the Fed, ECB, and BoE emphasising the importance of tightening policies to address inflationary concerns, while the BoJ maintained its dovish stance.
• Despite the bounce in US tsys, bears still hold sway at current levels. The recent pullback in 10s is contained inside the recent range and the contract remains in consolidation mode. The trend outlook is bearish.
• Cash ACGBs opened 3bp richer with the AU-US 10-year yield differential +2bp at +13bp.
• Swap rates opened 2-3bp lower.
• The bills strip flattens with pricing flat to + 5.
• RBA dated OIS pricing has opened flat to 3bp softer.
• (AFR) - It’s tempting to pick a Canberra insider for the RBA. But also risky. (See link)
• The local calendar sees the release of Retail Sales for May, which is anticipated to provide confirmation of the ongoing consumer slowdown.