AUSSIE BONDS: Richer With US Tsys, Little New From FOMC Minutes

ACGBs (YM +3.0 & XM +2.0) are stronger after US tsys finished richer on Monday, correcting from Friday's sharp post-data cheapening.

• In a relatively quiet week in Australia, the focus will be on survey data and whether they show any “observable effects on the Australian economy from developments in the global economy” (RBA May meeting minutes).
• On Tuesday, the local calendar will see Westpac consumer confidence for June and NAB’s business survey for May. While business confidence has been oscillating around zero for some time. The employment and price/cost components will remain of particular interest.
• On Thursday, Melbourne Institute inflation expectations for June are out. After printing below 4% in March, they have remained above this mark in the last two months, with May at 4.1%.
• Cash ACGBs are 2-4bps cheaper after yesterday’s holiday with the AU-US 10-year yield differential at -17bps.
• The bills strip has bull-flattened, with pricing flat to +2.
• RBA-dated OIS pricing shows a 25bp rate cut in July is given an 82% probability, with a cumulative 75bps of easing priced by year-end (based on an effective cash rate of 3.84%).
• This week, AOFM plans to sell A$1000mn of the 1.75% 21 November 2032 bond on Wednesday.

In local morning trade, NZGBs are 1bp richer after US tsys finished richer on Monday, correcting from Friday's sharp post-data cheapening, even as the $119bn in auctions loom.

• Positioning and dip buying provided support amid a lack of fresh catalysts.
• MNI US DATA: NY Fed Consumer Inflation Concerns Ease In May (link). The New York Fed's Survey of Consumer Expectations (SCE) showed an improvement across the board in May, with respondents both less pessimistic on economic prospects and less concerned about future inflation compared with April.
• Bloomberg - New Zealand Finance Minister Nicola Willis wants the central bank to increase the frequency of its rate decisions, ending its 12-week summer break."
• "The Reserve Bank of New Zealand (RBNZ) currently holds seven meetings a year, fewer than its global peers, and Willis thinks it should return to meeting eight times a year."
• "RBNZ's Conway says the labour market is softer than the jobless rate implies: "I think the labour market is definitely in a hole and I think, you know, this is getting to that uncertainty, job uncertainty. People are choosing to save more, to pay down debt." (BBG)
• RBNZ-dated OIS pricing shows 4bps of easing priced for July, with a cumulative 30bps by November 2025.

• MNI: UK BRC MAY BY VALUE SHOP SALES LFL +0.6% YY, TOTAL +1% YY