NEW ZEALAND: Manufacturing Activity & Outlook Strong And Its Hiring

TYU6 is dealing at 108-31+, -0-01+ from closing levels in today’s Asia-Pac session.

• Cash bonds finished Monday’s session showing a modest bear-steepener, with benchmark yields 1-4bps higher.
• While oil prices rallied in the lead-up to the NY session, it then fell to only around a percent on the day as Iran and Israel agreed to halt hostilities, but the ceasefire is fragile. President Trump also said that US-Iran negotiations continued despite the resumption of the conflict. This returned some optimism back into oil markets that the Strait of Hormuz would reopen
• MNI US CPI Preview: Monthly Moderation But Still Too High. Monthly inflation is expected to moderate to a still elevated pace in May, with MNI unrounded consensus pointing to 0.51% M/M for headline CPI and 0.23% M/M for core CPI. It should see headline CPI jump further to 4.2% Y/Y with a risk of 4.3% (either strongest since Apr 2023) whilst core CPI would see a more modest acceleration to 2.8-2.9% Y/Y (strongest since Sep 2025).
• MNI Techs: Treasuries reverse course to largely weaker again, low end of session range:   TYU6 trades -2 at 109-00.5 vs. 108-25 overnight low - initial technical support. The bear trigger lies at 108-08+, the May 19 low. Clearance of this level would confirm a assumption of the downtrend.

In post-Tokyo trade, JGB futures closed weaker, -10 compared to settlement levels, after US tsys finished showing a modest bear-steepener on Monday, with benchmark yields 1-4bps higher.

• While oil prices rallied through the APAC session and into early European trading, it then fell to be up only around a percent on the day as Iran and Israel agreed to halt hostilities, but the ceasefire is fragile. President Trump also said that US-Iran negotiations continued despite the resumption of the conflict. This returned some optimism back into oil markets that the Strait of Hormuz would reopen.
• Brent reached a high of $98.08/bbl and then fell to a low of $93.64. It rose 1.1% to $94.11. Despite Monday's large moves, the benchmark held between initial resistance at $102.77 and support at $89.93.
• MNI US CPI Preview: Monthly Moderation But Still Too High. Monthly inflation is expected to moderate to a still elevated pace in May, with MNI unrounded consensus pointing to 0.51% M/M for headline CPI and 0.23% M/M for core CPI. It should see headline CPI jump further to 4.2% Y/Y with a risk of 4.3% (strongest since Apr 2023) whilst core CPI would see a more modest acceleration to 2.8-2.9% Y/Y (strongest since Sep 2025).
• Today, the local calendar will see: Money Stock M2/M3, Machine Tool Orders YoY

ACGBs (YM -3.0 & XM -3.5) are weaker US tsys finished showing a modest bear-steepener on Monday, with benchmark yields 1-4bps higher.

• While oil prices rallied through the APAC session and into early European trading, it then fell to be up only around a percent on the day as Iran and Israel agreed to halt hostilities, but the ceasefire is fragile. President Trump also said that US-Iran negotiations continued despite the resumption of the conflict. This returned some optimism back into oil markets that the Strait of Hormuz would reopen.
• Cash ACGBs are 6bps cheaper, after yesterday’s holiday, with the AU-US 10-year yield differential at +40bps.
• The bills strip has bear-steepened, with pricing -1 to -4 across contracts.
• RBA-dated OIS pricing shows tightening across all meetings, with the probability of a 25bp hike rising from 10% for June to 82% by September and 122% by December 2026.  
• Today, the local calendar will see Westpac Consumer and NAB Business Confidence measures.
• NAB’s May business survey's price/cost components will be of particular interest as the RBA remains alert to a greater or faster pass through of higher costs to consumers.
  This week, the AOFM plans to sell A$1000mn of the 4.75% 21 October 2037 bond on Wednesday.