Weaker, Awaits Employment Data

ACGBs are cheaper (YM -7.0 & XM -5.0) with US tsys holding weaker after the bell as market sentiment improved on expectations of a breakthrough in resolving the debt ceiling issue. 2- and 10-year US tsy yields increased by 7bp and 3bp, respectively, marking the fourth consecutive trading session.

• Concerns about regional banks seemed to lessen with news that Western Alliance Bancorp had seen significant deposit growth recently. The KBW banking index was up 5%.
• Cash ACGBs opened 4-6bp cheaper with the AU-US 10-year yield differential +1bp at -9bp.
• Swap rates opened 4-6bp higher with the 3s10s curve 2bp flatter.
• The bills strip bear flattens with pricing -3 to -11.
• The latest piece from RBA watcher Terry McCrann suggested that a June pause is unlikely after the latest wages data. (link).
• RBA dated OIS opened 5-10bp firmer for meetings beyond September.
• The local calendar is slated to release the April Employment Report today with elevated job vacancies and strong immigration levels likely to deliver a robust employment outcome. BBG consensus expects a +25k employment change and an unchanged unemployment rate of 3.5%.
• Across the Tasman, the NZ Government hands down its Budget at 0300 BST.