EM ASIA CREDIT: Acen: Confirms Australia project approved

TYM5 is trading 110-05, down 0-05 from its close. 

• The US 2-year yield opens around 3.974%, down 0.03 from its close.
• The US 10-year yield opens around 4.477%, unchanged from its close.
• (Bloomberg) -- The US Treasury has $82 billion of extraordinary measures left, in addition to its cash pile, to help keep paying the government’s bills, the department said, citing data as of May 14.
• Treasury Secretary Scott Bessent told lawmakers last week that the US is likely to exhaust its borrowing authority in August if the federal debt ceiling isn’t raised or suspended by then
• The 10-year Yield looks likely to test the 4.5% resistance area again on the downgrade. A sustained break above this level could see another round of selling targeting the 4.75% area. Support towards 4.35% held Friday night, dips back towards here should see supply emerge once more.
• Data/Events: Atlanta Fed President Raphael Bostic , Dallas Fed President Lorie Logan and Fed Vice Chair Philip Jefferson speak at Amelia Island conference. New York Fed President John Williams speaks at an event organized by the Mortgage Bankers Association.

Natural gas prices were weaker on Friday but Europe finished the week higher while the US was lower as the two regions are in different inventory positions. Europe remains vulnerable to unscheduled outages and supply disruptions as it refills storage. Gas fell 0.5% to EUR 35.13 to be up 1.5% last week and 8.7% in May. Negotiations on trade, Ukraine and Iran could also drive prices. 

• Morgan Stanley estimates that Europe will need to import 45% more LNG this year to reach storage rates of around 80%. Relatively low demand from Asia so far this season has helped it to increase LNG cargoes more than usual. However, there was unplanned maintenance at Norway’s Troll and Aasta Hansteen fields last Thursday.
• US gas fell 1.1% to $3.33 on Friday to be down 12.4% on the week but little changed in May. The down move was driven by a higher-than-average inventory build as well as forecasts for milder weather in parts of the US at the end of the month, reducing the chance of a pickup in cooling demand.
• US lower-48 gas production rose 4.5% y/y on Friday while demand fell 2% y/y. The EIA reported a 100 bcf rise in inventories in the previous week, above the 5-year average of 83bcf. The total is now 2.6% above the 5-year average, according to Bloomberg.
• In April China’s imports of LNG in volume terms fell 24.8% y/y after -24.5%, while pipeline natural gas rose 23.6% y/ up from 2.0% as it increases purchases from Russia.

The focus of the week will be on the RBA which is widely expected to cut rates 25bp to 3.85%. A statement on monetary policy including updated staff forecasts will also be published with the decision at 1430 AEST followed by Governor Bullock’s press conference at 1530 AEST. Deputy Governor Hauser speaks on Thursday at 1830 AEST about his trip to China.

• Data releases are minimal this week. Westpac’s April leading index is released on Wednesday. It fell in March and was showing signs of an impact from US trade policy announcements. The series leads detrended growth by three to nine months.
• Preliminary May S&P Global PMIs print on Thursday. They are signalling slight growth in activity across both services and manufacturing.