AUSSIE BONDS: Sharply Richer With US Tsys, Tariff Court Ruling Impact Faded
May-29 23:04
ACGBs (YM +7.0 & XM +9.0) are sharply stronger after US tsys reversed early weakness to finish stronger Thursday, with the belly outperforming on the curve.
- US tsys were on the back foot early as risk assets gained following late Wednesday's court ruling that blocked implementation of most of the White House's tariffs.
- But the initial reaction faded as markets assessed whether the legal decision would have a lasting effect.
- The bond rally extended in the afternoon after the third strong Treasury auction of the week, with 7Y Note seeing the joint-highest trade-through since August 2022 (2.9bp), and a record-low primary dealer takedown.
- Cash ACGBs are 7-8bps richer with the AU-US 10-year yield differential at -12bps.
- The bills strip has bull-flattened, with pricing +1 to +8.
- RBA-dated OIS pricing is 2-7bps softer across meetings today. A 25bp rate cut in July is given a 65% probability, with a cumulative 73bps of easing priced by year-end (based on an effective cash rate of 3.84%).
- Today, the local calendar will see Retail Sales, Private Sector Credit and Building Approvals data.
- The AOFM plans to sell A$1200mn of the 4.25% 21 March 2036 bond today.
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GOLD: Dollar Up and Gold Down
Apr-29 22:57
- The push pull of the USD was in full effect for gold overnight as a stronger dollar saw gold soften.
- As market expectations around tariffs now easing permeated through investor thinking the dollar had a better night which makes gold’s purchase price more expensive
- Gold closed in the US session down by -0.79% at USD3,317.41, off the highs of earlier in the month of $3,423.98
- The Thai Central Bank meets today and according to the BOT governor at a ceremony yesterday Thailand needs to brace for a ‘storm’ from the trade war and has increased their gold holdings accordingly.
- Gold ETF’s have experienced six straight days of outflows according to BBG.
- Gold remains one of the best performers year to date up 27% and the recent softening in prices appears likely driven by profit taking than a fundamental change in the outlook for bullion.
ASIA: Government Bond Issuance Today
Apr-29 22:49
- Thailand to Sell THB7bn of 2072 Bonds
- Bank of Thailand to Sell THB20bn of 181-Days FRNs
- Philippines to Sell 30.0 Billion 5-Year Bonds
- India to Sell 50 Billion Rupees 182-Day Bills
- India to Sell 90 Billion Rupees 91-Day Bills
- India to Sell 50 Billion Rupees 364-Day Bills
ASIA: Coming Up in Asia Today
Apr-29 22:47
| 1800GMT | 0700HKT | 0900AEDT | South Korea Industrial Production YoY MAR |
| 1800GMT | 0700HKT | 0900AEDT | South Korea Industrial Production MoM MAR |
| 1800GMT | 0700HKT | 0900AEDT | South Korea Cyclical Leading Index Change MAR |
| 2000GMT | 0900HKT | 1100AEDT | Philippines Exports YoY MAR |
| 2000GMT | 0900HKT | 1100AEDT | Philippines Exports MAR |
| 2000GMT | 0900HKT | 1100AEDT | Philippines Imports YoY MAR |
| 0130GMT | 0900HKT | 1100AEDT | Philippines Imports MAR |
| 0130GMT | 0900HKT | 1100AEDT | Philippines Trade Balance MAR |
| 0130GMT | 0930HKT | 1130AEDT | China Manufacturing PMI APR |
| 0130GMT | 0930HKT | 1130AEDT | China Non-Manufacturing PMI APR |
| 0130GMT | 0930HKT | 1130AEDT | China Composite PMI APR |
| 0200GMT | 0945HKT | 1145AEDT | Thailand Exports YoY MAR |
| 0300GMT | 1430HKT | 1630AEDT | Thailand Exports MAR |
| 1300GMT | 1430HKT | 1630AEDT | Thailand Imports YoY MAR |
| 1300GMT | 1430HKT | 1630AEDT | Thailand Imports MAR |
| 1300GMT | 1430HKT | 1630AEDT | Thailand Trade Balance MAR |
| 1300GMT | 1430HKT | 1630AEDT | Thailand BoP Current Account Balance MAR |
| 0000GMT | 1430HKT | 1630AEDT | Thailand BoP Overall Balance MAR |
| 0000GMT | 1430HKT | 1630AEDT | Bank of Thailand Benchmark Interest Rate Decision |
| 0000GMT | 1500HKT | 1700AEDT | Taiwan GDP YoY 1QA |
