Bonds rallied last week driven by lower benchmark yields amid dovish statements from US Federal Reserve (Fed) officials, easing fears of higher oil prices from the Israel-Iran conflict, and weaker economic data. Earlier in the week, Fed Governor Michelle Bowman, a notable hawk, gave support for a rate cut as soon as July. Her comments echoed statements from a Fed official the prior week. Lower oil prices from de-escalating tensions between Israel and Iran further added to the bullish momentum. The rally extended by the close of the week with the final reading of 1Q US gross domestic product (GDP) and Personal Consumption revised lower while Real Personal Spending for the month of May declined by 0.3% month-on-month, signaling weaker consumer spending. Asia credit spreads lagged the rally in risk assets amid tight spread levels, ending the week broadly 2 basis points (bps) wider.

• The May US Core Personal Consumption Expenditures Price Index Month-on-Month came in higher than expected at 0.2% versus 0.1% in a Bloomberg Survey
• The May US Initial Jobless Claims came in lower than expected at 236,000 versus 243,200 in a Bloomberg Survey
• The 1Q US GDP Annualized QoQ came in lower than expected at –0.5% vs –0.2% in a Bloomberg Survey