Yields Higher, At Cheaps, PMI Softening Fails To Impact

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.