FxWirePro: Daily Commodity Tracker - 21st March, 2022 
The Australian bonds slumped on Wednesday, following U.S trend after higher than expected U.S economic data strengthened bets of an interest rate hike in June. Also, firm crude oil prices drove-out investors from safe-haven buying. The yield on the benchmark 10-year Treasury note which moves inversely to its price rose 3bps to 2.313 percent and the yield on the short-term 2-year bonds climbed 2bps to 1.665 percent by 0510 GMT.
The April Commerce Department new home sales report revealed an increase in the headline measure of 16.6 percent m/m to 619k, well above market expectations for a 523k result, as compared to revised 531k in March (previous was 511k). Overall, upward pressure stemmed from gains seen in 3 of 4 measured regions, highlighted by increases in the Northeast (+52.8 percent), the South (+15.8 percent) and the West (+18.8 percent), partially offset by a decrease seen in the Midwest (-4.8 percent). The supply of new homes decreased to 4.7 months in April (down from 5.5 months in March). Meanwhile, the median price pushed higher 7.8 percent m/m to 321.1k (9.7 percent y/y), from $297.9k reading seen in March. Alongside the increase seen in April, we expect new home sales will find greater support over the course of 2016, though likely finding some headwinds from higher mortgage rates.
The Australian bonds have been closely following developments in oil markets because of their impact on inflation expectations, which are well below the Reserve Bank of Australia's target. Today, Crude oil jumped more than 1 percent and pushed closer to $50 a barrel on, hitting its highest in over seven months after industry data suggested a larger-than-expected drawdown in U.S. crude inventories last week. American Petroleum Institute inventory data showed crude oil dropped by 5.14 million barrels. Moreover, gasoline stocks climbed by 3.6 million barrels, while inventories of distillate fuels, including diesel and heating oil, fell by 2.9 million barrels. The International benchmark Brent futures rose 1.11 pct to $49.15 and West Texas Intermediate (WTI) jumped 1.17 pct to $49.19 by 0510 GMT.
“Hawkish comments from US Federal Reserve officials overnight raised the odds of near-term tightening, which were also weighing on US Treasuries” the St George economists said in a note.
"The market now assesses the chance of a June Fed hike at around 35 per cent, July is 60 per cent, while a hike by year-end is fully priced," they said.
Meanwhile, the benchmark Australia's S&P/ASX 200 index was trading up 0.34 pct, or 17.5 points, at 5,392.5 by 0510 GMT.
