NEW ZEALAND: Most Selected Price Indices Up In June, Accommodation Firmer

In post-Tokyo trade, JGB futures closed stronger, +26 compared to settlement levels, stronger after US tsys finished 1-4bps richer, with a flatter curve.

• "Iran is set to receive broad financial incentives under its agreement with the US, including the right to immediately sell oil, tap a $300 billion development fund and eventually unlock frozen assets, according to a near-final draft of the deal." – BBG
• "IRAN'S TOP NEGOTIATOR QALIBAF IN CALL WITH LEBANON'S PARLIAMENT SPEAKER: ISRAEL MUST WITHDRAW FROM 'THE OCCUPIED AREAS' IN LEBANON, PEOPLE OF SOUTHERN LEBANON MUST RETURN TO THEIR HOMES. THE WAR MUST END ON ALL FRONTS, INCLUDING LEBANON" - BBG
• "Oil's decline is a repricing of supply and demand, with the market now sniffing out whether there's a stickier lower demand equilibrium just as supply looks set to rise - a combination set to dominate for weeks and pressure prices." – BBG
• MNI BOJ WATCH: Uchida Flags More Hikes; No Timing Hint. Deputy Governor Shinichi Uchida said that the Bank of Japan will continue to raise its policy rate towards neutral levels after Tuesday's 25-basis-point hike, but provided no indication as to the timing of future moves which will depend on activity and price data.
• Today, the local calendar will see Trade Balance and Core Machine Orders data.

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TYU6 is dealing at 109-27+, -0-02+ from closing levels in today’s Asia-Pac session, ahead of today’s FOMC decision (MNI Preview here).

• Cash bonds finished 1-4bps richer.
• The front-end underperformed slightly with Fed hike pricing moderately higher (Dec 2026 +1bp, implying 19bp of tightening).
• There was further constructive news flow over the nascent US-Iran ceasefire deal. This included reports of Qatari plans to restore LNG flow and potential for U.S.-Iran negotiations to start as soon as Friday. WTI fell decisively below the $80/bbl mark.
• "Iran is set to receive broad financial incentives under its agreement with the US, including the right to immediately sell oil, tap a $300 billion development fund and eventually unlock frozen assets, according to a near-final draft of the deal." - BBG
• "IRAN'S TOP NEGOTIATOR QALIBAF IN CALL WITH LEBANON'S PARLIAMENT SPEAKER: ISRAEL MUST WITHDRAW FROM 'THE OCCUPIED AREAS' IN LEBANON, PEOPLE OF SOUTHERN LEBANON MUST RETURN TO THEIR HOMES. THE WAR MUST END ON ALL FRONTS, INCLUDING LEBANON" - BBG
• Data was largely 2nd tier, though was noteworthy for a surprisingly strong set of import price data, as well as the worst month for housing starts since May 2020 which led the Atlanta Fed's estimate of Q2 GDP growth to be revised down to 2.8% annualized from 3.3%.

ACGBs (YM +2.0 & XM +3.0) are stronger after US tsys finished 1-4bps richer, with a flatter curve. 

• There was further constructive news flow over the nascent US-Iran ceasefire deal.
• "Iran is set to receive broad financial incentives under its agreement with the US, including the right to immediately sell oil, tap a $300 billion development fund and eventually unlock frozen assets, according to a near-final draft of the deal." - BBG
• MNI RBA WATCH: Bullock Keeps Hike Prospects Alive Despite Hold. Reserve Bank of Australia Governor Michele Bullock stressed that monthly economic data remain volatile and should not be overinterpreted following Tuesday's decision to leave the cash rate unchanged at 4.35%, warning further rate increases cannot be ruled out.
• Cash ACGBs are 2-3bps richer with the AU-US 10-year yield differential at +35bps.
• The bills strip pricing is flat to +3 across contracts.
• RBA-dated OIS pricing shows tightening across all meetings, with the probability of a 25bp hike rising from 33% for August to 52% by November and 56% by December 2026.  
• Today, the local calendar will see Westpac Leading Index.
• This week, the AOFM plans to sell A$300mn of the 4.75% 21 June 2054 bond today and A$700mn of the 1.25% 21 May 2032 bond on Friday.