Trading Mixed After NZ Q2 CPI Upside Surprise

ACGBs are mixed (YM -1.0 & XM +3.5) and cheaper after NZ's Q2 CPI surprises on the upside. The upside surprise in non-tradable inflation is particularly noteworthy ahead of Australia's Q2 CPI release on 26 July.

• It was another risk-on NY session. The Dow had its 7th straight increase, climbing to the highest level since April 2022.
• Cash tsys finished 2bp cheaper to 3bp richer across the major benchmarks, the curve twist flattened pivoting on 5s.
• The cash ACGB curve has flattened with yields flat to -3bp. The AU-US 10-year yield differential is unchanged at +17bp.
• Swaps are trading mixed with rates flat to 3bp lower with the 3s10s curve flatter.
• Bills are slightly cheaper with pricing -1 across the strip.
• RBA-dated OIS pricing is slightly firmer across meetings.
• A Chinese economic crash triggered by a collapse in the country’s real estate sector is one of the single greatest risks facing the global economy, says one of the world’s leading economists, Brad DeLong. (See link)
• The local calendar sees the release of the Westpac -MI Leading Index.
• Today the AOFM plans to sell A$800mn of the 3.50% 21 December 2034 bond.