Slightly Richer, Narrow Range, PM Albanese Welcomes RBA Pause

ACGB are slightly higher in Sydney afternoon trade (YM +1.0 & XM +1.5) after trading in a relatively narrow range.

• Cash ACGBs are 1-2bp richer across benchmarks after the latest round of ACGB Nov-33 supply sees firm pricing, with the weighted average yield printing 0.84bp through prevailing mids and the cover ratio rising above 4.70x.
• Swap rates are 1-3bp lower with the 3s10s curve steeper.
• The bills strip is little changed with pricing flat to +1.
• RBA-dated OIS pricing is 1-2bp softer today after it closed yesterday 7-8bp softer across meetings. The market currently attaches a 58% chance of a 25bp hike at the August meeting, which follows the release of Q2 CPI data on July 26.
• (AFR) PM Anthony Albanese has welcomed the Reserve Bank’s decision to give households a reprieve from interest rate rises as “a good thing”. (See link)
• Sky News believes Department of Finance Secretary Jenny Wilkinson is the likely replacement for RBA Governor Lowe if his term is not renewed in September.
• Tomorrow the local calendar sees the May Trade Balance with a resilient export performance expected.
• Later today, FOMC June Meeting Minutes are published, Fed Williams speaks and May US Factory Orders print.