Slightly Richer, US Tsys Little Changed Overnight, June Jobs Data Due

ACGBs (YM +1.0 & XM +3.0) are slightly richer despite US tsys finishing little changed. The US 2-year yield closed 2bps higher at 4.44% with the 10-year unchanged at 4.16%.

• There was some concern over a surprise rise in UK CPI that could keep the BoE on hold next month, but concerns that the Trump policies will be inflationary, limiting Fed rate cuts, continue to dominate markets. The markets are looking for a Republican sweep in November.
• Many of the highflyers that have supported the tech sector this year slumped amid worries over trade restrictions as "Trump trades" gain favour.
• Today, the local calendar will see the June Employment Report. The data will be watched closely for signs of a pickup in the pace of labour market easing ahead of Q2 CPI due on July 31 and the next RBA meeting on August 6. Bloomberg Consensus is forecasting a 20k increase in new jobs.
• Cash ACGBs are 1-3bps richer, with the AU-US 10-year yield differential at +7bps.
• Swap rates are 2-4bps lower, with the 3s10s curve flatter.
• The bills strip has bull-flattened, with pricing flat to +3.
• RBA-dated OIS pricing is 1-3bps softer across 2025 meetings. Terminal rate expectations sit at 4.39%.