SGD: MAS Decision Due Shortly, Sell-Side Consensus Looks For No Change
A reminder that the MAS policy outcome is due in a few minutes. The sell-side consensus is for no change, although some forecasters are calling for a further easing by the central bank. The SGD NEER has drifted off recent highs, per Goldman Sachs estimates. We were last around -0.38% from the topside of the policy band. USD/SGD is in the 1.2880/85 region in the first part of dealings today. This is above the 50-day EMA level of 1.2860/65, while further north is the 100-day EMA at 1.2980. Recent lows in the pair were at 1.2746.
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MNI: MNI JAPAN MAY FACTORY OUTPUT +0.5% M/M; APRIL -1.1%
- MNI JAPAN MAY FACTORY OUTPUT +0.5% M/M; APRIL -1.1%
- JAPAN MAY FACTORY OUTPUT POSTS 1ST M/M RISE IN 2 MONTHS
JGBS: Futures Overnight Friday With US Tsys, Light Local Calendar
In post-Tokyo trade on Friday, JGB futures closed weaker, -15 compared to settlement levels, after US tsys closed 3-4bps cheaper on Friday.
- Core PCE inflation came in at 0.179% M/M unrounded in May after 0.136% in April (an upward rev from 0.116% prior), which was higher than expected (consensus roughly around 0.15%, implying a split between 0.1% and 0.2% rounded)) with a higher revision.
- Treasury Secretary Scott Bessent on Friday said one potential timeline for the announcement of a new Fed chair could come in October or November, playing down speculation that President Donald Trump may consider an earlier move to nominate a successor to Federal Reserve Chair Jerome Powell.
- Bloomberg - "Japan's Prime Minister Shigeru Ishiba emphasizes the need for speedy measures to ease inflation, while ensuring sufficient funds for social services like medical care, elderly care and pensions. Ishiba opposes cutting the sales tax, while the opposition proposes lowering the consumption tax on food to 0% to combat inflation."
- Today, the local calendar will see Industrial Production and Housing Starts.
AUSSIE BONDS: Modestly Weaker, US Tsys Closed Out Week With Yields Up Slightly
ACGBs (YM -3.0 & XM _4.0) are weaker after US tsys finished last week moderately cheaper. Friday night, the US 10-year yield ranged from 4.2378% to 4.2906%, closing around 4.277%.
- Nevertheless, US tsys closed out a third-straight positive week, with the Bloomberg US Treasury index posted a 0.8% return for the week, driven by economic data points and speculation about a more dovish Fed chief.
- Treasury Secretary Scott Bessent on Friday said one potential timeline for the announcement of a new Fed chair could come in October or November, playing down speculation that President Donald Trump may consider an earlier move to nominate a successor to Federal Reserve Chair Jerome Powell.
- Cash ACGBs are 2-4bps cheaper with the AU-US 10-year yield differential at -11bps.
- The bills strip is -1 to -2 across contracts.
- RBA-dated OIS pricing is little changed across meetings today. A 25bp rate cut in July is given a 94% probability, with a cumulative 80bps of easing priced by year-end (based on an effective cash rate of 3.84%).
- Today, the local calendar will see Melbourne Institute Inflation and Private Sector Credit.
- This week, the AOFM plans to sell A$1200mn of the 2.75% 21 June 2035 bond on Wednesday and A$1000mn of the 2.25% 21 May 2028 bond on Friday.
