ASIA: Government Bond Issuance Today

US Tsy futures are little changed in the first part of Monday dealings. The September 10yr future was last 109-30, +01+, from end Friday levels. We were weighed heavily on Friday after the firmer than expected NFP print (+139k, versus +126k forecast) and upside surprise on average hourly earnings (+0.4$%m/m, versus 0.3% expected). 

• For the 10yr future, we are near technical support at 109-26, the May 29 low, where a break would open key support and the bear trigger, at 109-12+, the May 22 low.
• The 10yr Tsy yield finished up above 4.50%, +11.5bps. May highs rested just above 4.60%. The US 2/10s curve didn't shift greatly, ending at +47bps.
• Fed easing expectations were pared to end 2025. Dec now has around -44bp of easing priced in, versus -54.6bp pre data.
• On the data front this week, there will be strong focus on Wednesday's CPI outcome. 

• RES 3: 96.501 - 76.4% of the Mar 14 - Nov 1 ‘23 bear leg
• RES 2: 96.207 - 61.8% of the Mar 14 - Nov 1 ‘23 bear leg
• RES 1: 95.960 - High Apr 7 
• PRICE: 95.730 @ 16:30 BST Jun 05
• SUP 1: 95.415/95.300 - Low May 15 / Low Jan 14  
• SUP 2: 95.275 - Low Nov 14  (cont) and a key support
• SUP 3: 94.707 - 1.0% 10-dma envelope

Aussie 10-yr futures rallied well on the RBA rate decision, reversing a small part of recent weakness. Recent price action pressured prices through to new pullback lows last week. Next support undercuts at 95.420 (pierced), the Feb 13 low, ahead of 95.275, the Nov 14 low and a key support. Clearance of this level would strengthen a bearish condition. To the upside, a recovery of recent losses would shift attention to resistance at 96.207, a Fibonacci retracement point.

The focus of the week is likely to be on May card spending data and RBNZ speakers.

• On Tuesday, Senior Manager Economics Richardson will speak on the May MPS at 1pm NZST (11am AEST). Then on Thursday external MPC member Gai speaks at lunchtime on “Monetary Policy and Trade Uncertainty”. There will be no media interviews at these events.
• Q1 manufacturing activity and volumes are released on Monday (there is no consensus estimate). Q1 GDP is released on June 19.
• Net migration for April prints on Wednesday. As the economy has slowed, migration numbers have trended lower too.
• Thursday sees May total and retail card spending. It picked up in Q4 last year but Q1 showed lacklustre household spending.
• The RBNZ shifted its focus towards more timely data last year and two pieces it monitors closely are BNZ’s manufacturing PMI with May released on June 13 and the performance of services index due on June 16. The PMI shifted into growth territory in January and picked up in April to 53.9 despite adverse trade developments, whereas services has signalled a contraction in activity essentially since March 2024 apart from a 50.3 in January 2025.