Yields Push Lower, Curve Bull-Flattens, RBA's Review Out Earlier

ACGBs (YM +5 & XM +5) are richer today after recovering some of the sell off post US data overnight. The RBA release half-yearly review earlier stating the the economy remains highly resilient.

• US Current Account Balance slightly narrowed at -$194.8b vs -$209.0b expected, while futures saw some pressure after slightly lower than estimated weekly jobless claims data: 210k vs. 213k est (prior up-revised to 212k from 209k, however).
• The RBA released its Financial Stability Review, stating that the Australian financial system remains highly resilient. Less than 1% of home loans are 90 or more days in arrears, although mortgage repayments have increased by 30-60% since the May 2022 rate hike. Most borrowers are expected to cope well if rates remain higher for an extended period, and local commercial property owners exhibit little financial stress. While banks anticipate a slight increase in arrears, they are projected to remain low overall (See link)
• Cash ACGBs are 3-7bps cheaper, the curve has bull-flattened with the 2yr -4.3bp at 3.800%, the 10y is -5.8bps at 4.031%, while the 2y10y is -0.450 to 21.25
• The AU-US 10-year yield differential 2bps lower at -20bps, while AU swap rates are 2-7bps lower.
• RBA-dated OIS pricing is 1-3bps softer for meetings beyond June. A cumulative 41bps of easing is priced by year-end.
• Looking ahead: The calendar is empty on Monday, while Tuesday we have Westpac Consumer Confidence