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Weaker, At Cheaps, Awaits Heavy Weekly Calendar

AUSSIE BONDS

ACGBs are weaker (YM -9.0 & XM -7.5), near session cheaps, despite US tsys being slightly richer in early Asia-Pac trade. With local headlines and data light today, local participants could be scaling back long positioning ahead of the RBA Minutes for May tomorrow, Q1 Wage Price Index on Wednesday, and the April Employment Report on Thursday.

  • Cash ACGBs are 8-9bp cheaper with the AU-US 10-year yield differential unchanged at -6bp.
  • Swap rates are 8-9bp higher with the 3s10s curve flatter.
  • The bills strip has bear steepened with pricing -5 to -11.
  • RBA dated OIS are 2-11bp firmer across meetings with late ‘23/early ’24 leading. A 16% chance of a 25bp hike is priced for June.
  • A Newspoll done for the Australian reports that only 13% of those surveyed believe that last week’s budget won’t be inflationary. 33% said that the decisions will be good for the economy.

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