RBA: VIEW: CBA Expects One More Cut As More Optimistic On Growth

The Australian Office of Financial Management (AOFM) will today sell A$300mn of the 4.75% 21 June 2054 Treasury Bond. The line was last sold on 17 June 2025 for the same amount. Several key factors will likely shape investor demand at today’s auction: 

• The bond’s outright yield is 5-10bps higher from the previous auction, though it remains around 10bps below the peak reached in May.
• Sentiment toward longer-dated global bonds remains cautious, which may temper demand.
• However, the 10s/30s yield curve is around the same level as the last auction, sitting at its steepest level since late 2021 — a potentially supportive technical factor.
• Overall, pricing is expected to remain firm, underpinned by a stable yield profile and a more attractive curve backdrop.
• Results are due at 0200 BST / 1100 AEST.

TYU5 is trading 110-24+, unchanged from its close. 

• The US 2-year yield opens around 3.893%, down 0.01 from its close.
• The US 10-year yield opens around 4.425%, down 0.01 from its close.
• MNI US OUTLOOK/OPINION: Analysts See Core CPI On Cusp Of 0.2% or 0.3% M/M In June. Ahead of tomorrow’s US CPI release, we note that the broad Bloomberg consensus looks for both core and headline CPI inflation at 0.3% M/M in June although unrounded estimates suggest a risk of rounding lower.
• MNI FED: Cleveland's Hammack: Close To Neutral Already, Important To "Wait And See": Cleveland Fed President Hammack (non-2025 voter, hawk) reiterated her patient approach to any future policy easing in an interview with Fox Business Monday. Hammack had previously cited a wide range of estimates of neutral rates from 2% to 4.6%
• The 10-year yield is again testing the 4.40/45% pivot within its wider 4.10% - 4.65% range. The market is clearly worried about inflation and the CPI this week will be a critical input into the market's thinking. A sustained close back above the 4.45% area could see more longs pared back, above here and the focus will turn back to the 4.60% area.

The Australian Office of Financial Management (AOFM) will today sell A$300mn of the 4.75% 21 June 2054 Treasury Bond. The line was last sold on 17 June 2025 for A$300mn. The sale drew an average yield of 4.9497%, at a high yield of 4.9550% and was covered 2.8433x. There were 50 bidders, 22 of which were successful and 16 were allocated in full. The amount allotted at the highest yield as a percentage of the bid at that yield was 52.9%.

• This week's ACGB supply is at the top end of the recent average weekly issuance of $1500-2000mn, with A$800mn of the 4.25% 21 March 2036 bond on Wednesday and A$1100mn of the 1.00% 21 November 2031 bond on Friday.
• During the first half of 2025-26, the AOFM plans to: issue a new October 2036 Treasury Bond (by syndication and subject to market conditions); conduct 2 Treasury Bond tenders most weeks; hold 1-2 Treasury Indexed Bond tenders each month.
• Issuance of Treasury Bonds (including Green Treasury Bonds) in 2025-26 is expected to be around $150 billion. Issuance of Treasury Indexed Bonds in 2025-26 is expected to be between $2 billion and $3 billion. 
• Results are due at 0200 BST / 1100 AEST.