UK T-BILL AUCTION RESULTS: 1/3/6-Month UKTBs

AUDJPY is down 0.5% today, testing initial support at the 20-day EMA of 96.157. This EMA has underpinned price action in the cross since June 4, so a close below it would be an important bearish development. Clearance of 96.157 would expose the July 22 low at 96.632. The reaction in risk assets to this afternoon’s heavy North America calendar (US QRA, US Q2 GDP, BOC decision and of course the FOMC) will be key for the cross in the immediate term. 

• News of an earthquake off the coast of Russia (which could be the sixth strongest on record) prompted light safe haven flows into the JPY overnight. However, Japan has since downgraded its tsunami alert in some areas. USDJPY is down 0.3% today at 148.00, but a bull cycle remains in place. Initial support is the 20-day EMA at 147.07.
• The BOJ is expected to maintain its policy rate at 0.5% overnight. Given there is no immediate need to raise rates, the BoJ is expected to maintain a wait-and-see approach. Markets will pay close attention to Governor Ueda’s tone during the post-meeting press conference. Ueda has maintained a cautious stance since May, but if the forecasts and risk assessments are revised higher, there’s a likelihood his tone may shift. MNI’s full BOJ preview is here.
• Meanwhile, the weaker-than-expected Q2 inflation report has applied pressure to AUD today. AUDUSD has pierced support at the 50-day EMA of 0.6505. A close below would signal scope for a stronger bearish reversal.
• The RBA is now fully expected to deliver a 25bp cut at its August 12 decision, with focus on whether further easing can be delivered in September (OIS price 36bps of cuts at typing). 

OI data points to net long setting dominating across much of the curve on Tuesday, only interrupted by a modest round of net short cover in FV futures.

• A net $12.6mln of DV01 equivalent was added across the curve, with TY futures seeing the biggest positioning move, likely aided by feedthrough from strong demand at the 7-Year auction.

The Netherlands has announced it will be looking to sell the following next Monday, August 4:

• E0.5-1.5bln of the 4-month Nov 27, 2025 DTC
• E1.0-2.0bln of the new 6-month Jan 29, 2026 DTC