AUSSIE BONDS: AUCTION PREVIEW: ACGB Dec-35 Supply Due
The Australian Office of Financial Management (AOFM) will today sell A$1200mn of the 4.25% 21 December 2035 bond. The line was last sold on 21 May 2025 for A$1200mn. The line was opened via syndication on 24 July 2024 for A$11.5bn.
- The last sale drew an average yield of 4.4255%, at a high yield of 4.4275% and was covered 3.1042x. There were 39 bidders, 20 of which were successful and 12 were allocated in full. The amount allotted at the highest yield as a percentage of the amount bid at that yield was 34.5%.
- This week's ACGB supply is above the recent average weekly issuance of $1500-2000mn, with A$1000mn of the 2.75% 21 November 2029 bond due on Friday.
- During the first half of 2025-26, the AOFM plans to: issue a new October 2036 Treasury Bond (by syndication and subject to market conditions); conduct 2 Treasury Bond tenders most weeks; hold 1-2 Treasury Indexed Bond tenders each month.
- Issuance of Treasury Bonds (including Green Treasury Bonds) in 2025-26 is expected to be around $150 billion. Issuance of Treasury Indexed Bonds in 2025-26 is expected to be between $2 billion and $3 billion.
- Results are due at 0200 BST / 1100 AEST.
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US TSYS: Futures Track Sideways, Tsy Yields Little Changed
US Tsy futures have started Monday's session tracking sideways. We were last at 109.31, +02, for the September 10yr future. Cash Tsy yields have opened up a little mixed, with back end slightly firmer in yield terms. The 10yr yield was last near 4.51%. We have seen some softness in the front end, the 2yr last around 4.02%, off close to 2bps versus end Friday levels.
- The US 2/10s Tsy curve was last around +49bps, slightly stepper versus end Friday levels, but still well within recent ranges.
- Weekend news flow was focused on US protests in major cities, along with planned US-China trade talks, which resume in London today. US equity futures were around flat in latest dealings.
- The main data focus will be on Wednesday's CPI print.
OIL: Crude Breaks Above Resistance On Trade Hopes
Oil prices jumped on Friday boosted by news that US-China trade talks would take place in London on Monday and data showing no deterioration in the US labour market in May following the reciprocal tariff announcement at the start of April. The market had been worried that increased protectionism and uncertainty would weigh on energy demand. The USD index rose 0.3%.
- WTI rose to a high of $64.80/bbl following the better-than-expected US payroll data. It finished up 2.2% to $64.77 to be up 6.6% on the week. It has started today lower at $64.60, but remains above initial resistance at $64.19 opening up $65.82, a key level. The bear trigger is at $54.33. Bloomberg reports that volatility is close to its lowest since early April as benchmarks range trade.
- Brent reached $66.67/bbl and finished up 2% at $66.65 to be 6.2% higher on the week. It is currently around $66.56. The benchmark traded above both the 50-day EMA at $65.28 and 13 May high at $66.30 opening up $67.73. The bull trigger is at $73.88, 2 April high. The bear trigger is at $57.78.
- Supply developments remain in focus following OPEC’s decision to increase output 411kbd from July and Saudi comments that it is considering further rises over the northern hemisphere summer. At the same time, Iran-US talks are ongoing and if there is an agreement may ease sanctions on oil exports, but Ukraine-Russia ceasefire negotiations appear to have failed with the possibility restrictions on Russia will be expanded.
MNI: MNI JAPAN Q1 GDP REV -0.0% Q/Q; PRELIM -0.2%; MEDIAN -0.2%
- MNI JAPAN Q1 GDP REV -0.0% Q/Q; PRELIM -0.2%; MEDIAN -0.2%
- JAPAN Q1 ANNUALIZED GDP REV -0.2%; PRELIM -0.7%; MEDIAN -0.7%
