Free Trial

Yields Higher, At Cheaps, PMI Softening Fails To Impact

AUSSIE BONDS

ACGBs are trading on a low note (YM -10.0 & XM -4.5) as local participants digest the hawkish actions and speak from global banks yesterday.

  • There has been little in the way of market moving domestic data, with Judo Bank’s preliminary PMI having limited impact.
  • US tsys are slightly stronger in early Asia-Pac trade with yields 0.2-0.7bp lower.
  • Cash ACGBs are 5-9bp cheaper with the 3/10 curve flatter and the AU-US 10-year yield differential -1bp at +23bp.
  • Swap rates are 5-10bp higher with the 3s10s curve flatter and EFPs little changed.
  • The bills strip bear steepens with pricing -6 to -12.
  • RBA dated OIS are 7-13bp firmer for meetings beyond October with December leading. Terminal cash rate expectations push through 4.60% barrier to 4.64%.
  • Judo Bank and S&P Global's release of June flash PMIs shows the composite index at a 3-month low of 50.5 from 51.6 in May. The manufacturing index rises slightly to 48.6 but the services index falls to 50.7 from 52.1 in May.
  • The next major data is the release of the CPI Monthly next Wednesday.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.