Slightly Mixed, May-28 Supply Due

ACGBs (YM -1.0 & XM +0.5) are slightly mixed after a subdued session overnight with US markets out for the 4^th of July holiday. US tsys have re-opened weaker after closing early yesterday.

• The focus for the markets overnight has been on the UK election. According to exit polls, the main opposition Labour Party is set for a record majority amid a collapse in support for the governing Conservatives (see MNI link). Markets have seen little reaction to the results.
• The Euro Stoxx index was up 0.4% as investors await the second round of the French elections on Sunday.
• Looking ahead to US Payrolls due out later today - Nonfarm payrolls are expected to moderate in June after a surprisingly strong May. However, with heightened uncertainty around what is the genuine pace of employment growth - See MNIs Payroll Preview here.
• Cash ACGB movements are bounded by +/- 1bp.
• Swap rates are 1bp higher to 1bp lower, with the 3s10s curve flatter.
• The bills strip sees pricing flat to -1.
• RBA-dated OIS pricing is slightly firmer for late 2024/early 2025 meetings. Terminal rate expectations sit at 4.49%.
• Today, the local calendar will see Foreign Reserves data alongside the AOFM planned sale of A$900mn of the 2.25% 21 May 2028 bond.