Slightly Stronger, Jun-35 Supply Due

ACGBs (YM flat & XM +1.5) are slightly stronger after US tsys reacted positively to a weaker-than-expected US retail sales report and a strong 20Y bond auction. US tsys finished with yields 5-7bps lower across benchmarks.

• US Retail Sales: Advance MoM (0.1% vs. 0.3% est, prior down revised to -0.2% from 0.0%), Ex Auto and Gas (0.1% vs. 0.4% est, prior revised to -0.3% from -0.1%). Retail Sales Control Group (0.4% vs. 0.5% est, prior revised to -0.5% from -0.3%).
• Fed Collins said the US central bank should be patient, while Fed Williams said the US economy is “moving in the right direction” but declined to say when he would favour an interest-rate decrease.
• US markets are shut today for the Juneteenth holiday.
• Cash ACGBs are flat to 1bp richer, with the AU-US 10-year yield differential at -8bps.
• Swap rates are flat to 2bps lower.
• The bills strip has twist-flattened, with pricing -2 to +1.
• RBA-dated OIS pricing is 2-7bps firmer than pre-RBA levels. A cumulative 9bps of easing is priced by year-end.
• Today, the local calendar is empty apart from the AOFM's planned sale of A$800mn of the 2.75% Jun-35 bond. The AOFM also plans to sell A$700mn of the 1.50% 21 June 2031 bond on Friday.