AUSSIE BONDS: Richer, Little Changed After Retail Sales Data Beat
ACGBs are richer on the day (YM +7.0 & XM +6.0), and little changed after retail sales data for March exceeded expectations with an increase of 0.4% M/M (+0.2% est.). While retail sales recorded a third straight rise in March, a pull-back in spending on discretionary goods has seen monthly turnover remain at a similar level to six months ago (ABS). Food retailing has now recorded 13 consecutive monthly rises, largely driven by high food inflation.
- Cash ACGBs are little changed after the data to be 6-7bp richer on the day with the AU/US 10-year yield differential +4bp at -4bp.
- Swap rates are 5-6bp lower on the day with EFPs 2bp wider.
- The bills strip remains flatter after the data with pricing +3 to +9.
- RBA dated OIS is flat to 4bp softer after the data with November leading. A 13% chance of a 25bp rate hike in June is priced with terminal rate expectations at 3.93% (August).
- RBA Kohler is scheduled to speak at the CEDA Conference (0555 BST).
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AUD: AUD/USD Lower, But Support Ahead Of 0.6650, Housing Data Doesn't Impact Sentiment
AUD/USD was last around 0.6670/75, still around 0.20% off NY closing levels from last week. Still, we are up from earlier lows close to 0.6650. Markets have moved away from earlier extremes in terms of the oil price bounce and higher US yield backdrop. Brent was last around $84/bbl, versus earlier highs near $86.50/bbl, while the US 2yr yield is around 4.08% against an earlier high close to 4.10%.
- Just released housing data was mixed. Home loans coming in at -0.9% m/m (-1.8% forecast and prior revised to -2.4% from -5.3%). Building approvals were softer though at +4.0% (10% forecast), but private sector houses were +11.3% m/m (prior -13.5%).
- Earlier the inflation gauge confirmed that the AU inflation peak was behind us.
- Tomorrow, the RBA cash rate is expected to be left unchanged at 3.60%.
US TSYS: Holding Cheaper
The earlier cheapening, as OPEC+ unexpectedly cut Oil production, has held through the Asian morning. WTI has pared gains of as much as 7% to sit ~5% firmer. This leaves cash tsys sitting 3-6bps cheaper across the major benchmarks, the curve has bear flattened. TYM3 deals at 114-26, -0-03+.
- Participants look to Caixin Manufacturing PMI data from China which is on the wires shortly.
MNI: AUSTRALIA MAR BUILDING APPROVALS +4% M/M, -31.1% Y/Y
- MNI: AUSTRALIA MAR BUILDING APPROVALS +4% M/M, -31.1% Y/Y
