AUSSIE BONDS: Cheaper Ahead Of Jackson Hole, Jun-54 Supply Due
Aug-21 23:17
ACGBs (YM -3.0 & XM -3.0) are weaker after a heavy close for US tsys. US yields finished 2-4bps higher, with a slightly flatter curve. Many participants plied the sidelines ahead of today’s Jackson Hole economic symposium with Fed Chairman Powell speaking at 1000ET.
- Known WSJ Fed Watcher Nick Timiraos has published an article titled, "Divisions Grow Inside Fed Ahead of Decision on September Rate Cut – WSJ via BBG". The article presents contrasting views on the Fed outlook, with Cleveland Fed President Beth Hammack stating: ""I see an inflation picture that is too high and rising, and moving in the wrong direction," while adding: " The labor market remains "reasonably good," she said, creating no reason to lower interest rates at the Sept. 16-17 policy meeting."
- Cash ACGBs are 3bps cheaper with the AU-US 10-year yield differential at-2bps.
- The bills strip has bear-steepened, with pricing -1 to -4.
- RBA-dated OIS pricing is slightly firmer across meetings today. A 25bp rate cut in September is given a 26% probability, with a cumulative 34bps of easing priced by year-end (based on an effective cash rate of 3.59%).
- Today, the local calendar will be empty apart from the AOFM's planned sale of A$300mn of the 4.75% 21 June 2054 bond.
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POLITICAL RISK: Japan PM To Consider Future After Assessing Trade Talk Progress
Jul-22 23:09
Local Japan newspaper Yomiuri is reporting that Japan PM Ishiba will consider his future after assessing US-Japan trade negotiations. This comes after the weekend upper house election results where the LDP led coalition lost its majority.
- Via RTRS: "Japanese Prime Minister Shigeru Ishiba is planning to decide on his future after assessing progress in tariff negotiations with the United States, Yomiuri newspaper reported on Wednesday. The prime minister is planning to hold a press conference to announce his decision once the tariff negotiations' outcome becomes clear, the newspaper reported without citing its sources."
- Elsewhere, NHK noted: "Japan’s chief trade negotiator Ryosei Akazawa has entered the White House to discuss tariffs with US President Donald Trump, public broadcaster NHK said citing government sources. Akazawa earlier met with US Treasury Secretary Scott Bessent for about 30 minutes, according to NHK, after Bessent suggested the two sides may be getting closer to an agreement." via BBG.
BONDS: NZGBS: Richer After US Tsys Recent Rally Extends
Jul-22 23:06
In local morning trade, NZGBs are 2bps richer after a good day for Treasury bulls.
- US yields continued to fall amid several factors. Yields 3bps lower with the 10- and 30-year rates to 4.344% and 4.917%, respectively. The 2-year yield also fell 3bps to 3.833%.
- Ongoing momentum from the technical buying supported after key levels held last week, including 4.50% on the 10-year, 5.00% on the 30-year, and 4.00% on the 2-year.
- The upcoming tariff deadlines added to the demand. Treasury Secretary Bessent's comments supporting Fed Chair Powell staying on helped trim Fed fears.
- There have been further indications of decent demand for US tsys at auction, and expectations for no increases in nominal coupon issuance at next week's August refunding are further supported.
- Swap rates are 1bp lower.
- RBNZ-dated OIS pricing is little changed across meetings. 21ps of easing is priced for August, with a cumulative 38ps by November 2025.
- Today, the local calendar will be empty.
- On Thursday, the NZ Treasury plans to sell NZ$225mn of the 3.0% Apr-29 bond, NZ$175mn of the 2.75% Apr-37 bond and NZ$50mn of the 5.0% May-54 bond.
MNI: UK APR-JUN MEDIAN PAY AWARDS +3% :Brightmine
Jul-22 23:01
- MNI: UK APR-JUN MEDIAN PAY AWARDS +3% :Brightmine
