EM ASIA CREDIT: Axis Bank (AXSBIN): New USD Priced

TYU6 is dealing at 109-15, +0-15+ from closing levels in today’s Asia-Pac session.

• There has been a risk on move at the start of the week's trading on growing optimism that there will be a US-Iran deal after President Trump said that an agreement is close but this was followed by doubts voiced by both Trump and the Iranians.
• Trump said that he won't "rush into a deal" and talks are ongoing and there still seem some sticking points, such as the release of frozen Iranian assets.
• On Friday, US tsys finished with a modest twist-flattener. There will be no cash trading today for the Memorial Day holiday.
• MNI BRIEF: Waller Would Hike If Mid-Term Price Expectation Rise. Federal Reserve Governor Chris Waller said Friday a rise in medium-term inflation expectations would prompt him to consider hiking rates.
• MNI Techs: The technical trend set-up in TYU6 remains bearish and short-term gains are considered corrective. Note that a stronger near-term bull cycle would allow an oversold trend condition to unwind. Initial firm resistance to watch is the 20-day EMA, at 110-00+. The bear trigger has been defined at 108-18, Tuesday's low. Clearance of this level would confirm a resumption of the downtrend and open 108-00 and below.

In post-Tokyo trade on Friday, JGB futures closed stronger, +20 compared to settlement levels, after US tsys finished with a modest twist-flattener.

• However, US tsys futures are sharply stronger in today's Asia-Pac session following the weekend's Middle East conflict developments. There will be no cash trading today for the Memorial Day holiday.
• There has been a risk on move at the start of the week's trading on growing optimism that there will be a US-Iran deal after President Trump said that an agreement is close but this was followed by doubts voiced by both Trump and the Iranians.
• Trump said that he won't "rush into a deal" and talks are ongoing and there still seem some sticking points, such as the release of frozen Iranian assets.
• MNI BRIEF: Waller Would Hike If Mid-Term Price Expectation Rise. Federal Reserve Governor Chris Waller said Friday a rise in medium-term inflation expectations would prompt him to consider hiking rates.
• Today, the local calendar will see Department Sales data alongside 5-year Climate Transition supply.

ACGBs (YM +1.0 & XM +3.5) are modestly stronger with US tsys futures sharply stronger following the weekend's Middle East conflict developments.

• There has been a risk on move at the start of the week's trading on growing optimism that there will be a US-Iran deal after President Trump said that an agreement is close but this was followed by doubts voiced by both Trump and the Iranians.
• Trump said that he won't "rush into a deal" and talks are ongoing and there still seem some sticking points, such as the release of frozen Iranian assets.
• Cash ACGBs are 2-3bps richer with the AU-US 10-year yield differential at +33bps, lowest since late last year.
• The bills strip has twist-flattened, with pricing -1 to +3 across contracts.
• RBA-dated OIS pricing shows tightening across all meetings, with the probability of a 25bp hike rising from 10% for June to 73% by September and 104% by December 2026.  
• The local calendar will be empty today and tomorrow ahead of April CPI data on Wednesday.
• This week, ACGB supply will be below the recent weekly issuance average of $2000mn. The AOFM only plans to sell A$1000mn of the 2.75% 21 November 2029 bond on Friday.