AUSSIE BONDS: 2025-26 Bond Issuance Forecast Cut By A$25bn

USD/CNH probed above 7.1100 amid broader USD gains as Monday trade unfolded, but there was no follow through. We track near 7.1090 in early Tuesday dealings, after losing a little over 0.10% for Monday's session. Upside focus will rest with the 20-day EMA at 7.1165, then the 50-day near 7.1270. For now, the pair looks to have found a base ahead of the 7.0900 level as broader USD sentiment stabilizes. US Tsy yields were little changed on Monday, with some Fed speak in support of a Dec rate cut (notably Waller). US equity sentiment was softer.

• USD/CNH gains were more modest than broader USD index gains on Monday, with the BBDXY index up around 0.30%, the DXY +0.25%. Spot USD/CNY finished up at 7.1077, while the CFETS basket tracker was at 97.80, little changed for the session.
• CNH/JPY broke higher (as USD/JPY rallied through 155.00) to 21.8440 and we track just below this level currently. Upside focus will rest on a test above 22.00. Focus today will be on a meeting between BoJ Governor Ueda and new PM Takaichi, amid signs of tension between the government and BoJ around potential hike timing.
• With the USD/CNY fixing bias still pointing to yuan gains/resilience we would expect CNH to continue to outperform broader USD gains.
• Local equity market sentiment may remain under pressure amid broader global tech concerns. The Golden Dragon index lost a further 1.21% in US Trade on Monday.
• On the data front, we should get Oct FDI figures today. Yesterday, the FX settlement ratio for Oct eased back to 62.9% from 71.2% in Sep. 

Oil prices eased on Monday after geopolitical risks eased with the apparent reopening Russia’s Novorossiysk port as ships have been sighted there again. The rise in the US dollar also pressured crude (USD BBDXY +0.3%). Oil continues to trend lower over November as the key market driver remains excess supply. 

• WTI fell 0.6% to $59.72/bbl after a high of $60.44 to be down 2% in November. The benchmark has been oscillating around the $60-mark and held above the bear trigger at $55.96. Initial resistance is at $62.59, 24 October high.
• Brent was 0.6% lower at $63.99 off the day’s peak at $64.72, below initial resistance at $65.95. It is down 1.2% this month but tends to revert back to $63.50-64.00. It has remained well above the bear trigger at $59.97.
• Ukraine continues to target Russia’s energy infrastructure with a strike on its Black Sea Novorossiysk port and a Rosneft refinery in the Volga region. The attacks appear to be affecting its refined exports with diesel prices rising sharply this month. It also remains unclear the impact of sanctions on Lukoil and Rosneft exports and overseas assets.
• Other tense geopolitical points include Iran’s apparent diversion of a tanker in UAE waters into its own on Friday, Sudan’s civil war impacting its oil shipments, and issues between Venezuela and the US. President Trump said he’s prepared to talk with Venezuela’s Maduro. 

NZGBs are 2-3bps cheaper despite US tsys finishing Monday’s session slightly richer.

• August US construction data - whose Oct. 1 release was delayed 6 weeks due to the federal government shutdown - showed a 0.2% M/M rise in spending (-0.1% expected, 0.2% prior rev from -0.1%). The NY Fed's Empire State Manufacturing Survey impressed in November, with the current General Business Conditions index rising 8 points to a 1-year high of 18.7 (well above the 5.8 expected).
• Yesterday, the Treasury announced the launch of the syndicated tap of the 4.25% coupon, 15 May 2036 nominal NZGB. The Treasury expects to issue at least NZ$4.0 billion of the 15 May 2036 nominal bond. The transaction will be capped at NZ$6.0 billion. Initial price guidance is 12 to 15basis points over the 15 May 2035 nominal bond.
• The issue will be priced today, and further issuance of the bond will not occur before March 2026. Given the timing of the launch, the Treasury also announced the cancellation of the tender scheduled for 20 November 2025.
• Swap rates are 4bps cheaper.
• RBNZ dated OIS pricing is little changed across meetings. 25bps of easing is priced for November, with a cumulative 34bps by February 2026.
• Today, the local calendar will see Non-Resident Bond Holdings.

Bloomberg Finance LP