JGBS: 20Y Leads Rally, Ueda: BoJ To Assess JGB Tapering Program

•   RES 4: 1.3605 1.236 proj of the Feb 28 - Apr 3 - 7 price swing 
• RES 3: 1.3550 High Feb 24 ‘22 
• RES 2: 1.3510 1.236 proj of the Feb 28 - Apr 3 - 7 price swing 
• RES 1: 1.3444 High Apr 28 / 29 
• PRICE: 1.3391 @ 06:10 BST Apr 30
• SUP 1: 1.3280 Low Apr 28 
• SUP 2: 1.3202 20-day EMA
• SUP 3: 1.3041/3002 Low Apr 14 / 50-day EMA 
• SUP 4: 1.2807 Low Apr 10 

The trend condition in GBPUSD remains bullish and Monday’s fresh cycle high reinforces current conditions. The move higher highlights a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Moving average studies are in a bull-mode position too, signalling a dominant uptrend. Sights are on 1.3510, a Fibonacci projection. Support to watch lies at 1.3202, the 20-day EMA.

• RES 4: 120.20 High Dec 12 ‘24 (cont)           
• RES 3: 120.000 Psychological round number          
• RES 2: 119.960 High Apr 7 and the bull trigger
• RES 1: 119.780 High Apr 22                                     
• PRICE: 119.400 @ 05:45 BST Apr 30  
• SUP 1: 119.180 Low Apr 23       
• SUP 2: 118.996 20-day EMA   
• SUP 3: 118.060 Low Apr 10   
• SUP 4: 117.680 Low Apr 9 and a key support      

Bobl futures are trading closer to their recent highs and a bull cycle remains in play. The steep sell-off between Apr 7 - 9 is considered corrective. The early April rally resulted in a break of key resistance at 119.040, the Feb 28 high, strengthening bullish conditions. The focus is on the 120.000 handle next. Firm support lies at 117.680, the Apr 9 low. The 20-day EMA, an important short-term support, is at 118.996.

ACGBs (YM flat & XM +2.0) slightly mixed on the day but 1-4bps cheaper after today’s Q1 CPI data.

• Q1 headline and underlying inflation printed 0.1pp higher than expected but the trimmed mean at 2.9% y/y is below the top of the RBA’s 2-3% target band for the first time since Q4 2021.
• Cash US tsys are slightly mixed in today's Asia-Pac session.
• Cash ACGBs are flat to 2bps richer on the day, with the AU-US 10-year yield differential at flat.
• Swap rates are flat to 4bps lower, with the curve flatter.
• The bills strip has twist-flattened, with pricing -5 to +3.
• The data is close to the RBA’s expectations and at this stage consistent with inflation sustainably remaining within the band. Thus, another 25bp rate cut to 3.85% is likely on May 20, assuming that easing is consistent with the RBA’s updated outlook.
• RBA-dated OIS pricing is 2-5bps firmer across meetings after today’s data. A 50bp rate cut in May is given a 3% probability, with a cumulative 112bps of easing priced by year-end.
• Tomorrow, the local calendar will see CoreLogic Home Values, Trade Balance and Q1 Terms of Trade data.
• The AOFM plans to sell A$1200mn of the 2.75% 21 June 2035 bond on Friday.