JAPAN DATA: Retail Sales Pot Slight Miss, Still Up +3%y/y
Apr-30 00:27
Japan retail sales were slightly below market forecasts. We were -1.2%m/m, against a 0.7% forecast, with Feb revised to a 0.4% gain. In y/y terms we rose 3.1%, against a 3.5% forecast and 1.3% in Feb.
- The y/y trend is around mid range of the past 12 months as we have oscillated between flat to +5%. The authorities remain focused on driving sustained/positive real household spending growth, aided by positive real wages growth. The next round of labour earnings data is due next Friday.
- Looking at the detail, the biggest m/m declines were for motor vehicles -4.8%m/m, and department stores -3.7%m/m.
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US TSYS: Cash Bonds Richer To Start The Week
Mar-31 00:17
TYM5 is 111-17+, +0-11 from closing levels in today's Asia-Pac session.
- According to MNI's technicals team, Jun'25 10Y futures have breached initial technical resistance at 110-26 (Mar 25 high). The medium-term trend condition is bullish, the first key resistance is located at 111-17+, the Mar 20 high.
- A strong risk-off tone has extended into today’s Asia-Pac session ahead of this week's Trump Tariff "Liberation Day" rollout on April 2, not to mention Friday's employment data for March.
- Cash US tsys are 5-6bps richer across benchmarks, with a slight steepening bias, as concern over the health of the US economy fuels demand for haven assets.
- "US Treasuries have outperformed stocks this quarter, heading for a more than 2% gain, while the equity benchmark S&P 500 fell about 5%. It marks the first time since the onset of the pandemic in March 2020 that stocks fell, and bonds rose in a three-month period." (per BBG)
AUSSIE BONDS: Solid Absorption of May-28 Supply With More Demand Present
Mar-31 00:11
The latest round of ACGB May-28 supply sees the weighted average yield print 1.15bps through prevailing mids (per Yieldbroker), extending the recent trend of firm pricing at ACGB auctions.
- Moreover, the cover ratio jumped to a robust 4.4250x from 3.5400x at the previous outing.
- As highlighted in the preview, the outright yield was 15-20bps higher than the previous but around 55bps lower than the cycle peak in early November last year.
- Additionally, market expectations for RBA easing in 2025 have become more aggressive ahead of tomorrow’s RBA Policy Decision. While a 25bp rate cut in April is given only a 5% probability, a cumulative 70bps of easing is priced by year-end.
- Also on the positive side, it's important to note that the May-28 bond was included in the YM basket and that sentiment towards global bonds has improved recently.
- There has been no notable movement in the cash line in post-supply dealings.
AUSSIE BONDS: ACGB May-28 Auction Results
Mar-31 00:03
The Australian Office of Financial Management (AOFM) sells A$600mn of the 2.25% 21 May 2028, issue #TB149:
- Average Yield (%): 3.6498 (prev. 3.5038)
- High Yield (%): 3.6525 (prev. 3.5050)
- Bid/Cover: 4.4250x (prev. 3.5400x)
- The amount allotted at the highest accepted yield as a percentage of the amount bid at that yield (%): 72.4 (prev. 96.4)
- Bidders 37 (prev. 32), successful 11 (prev. 12), allocated in full 7 (prev. 7)
