AUSSIE BONDS: ACGB Dec-35 Auction Result

JGB futures sit slightly higher in the first part of Monday dealing, last near 139.21, -.14 versus settlement levels for June futures. This keeps us firmly within recent ranges. US Tsy futures have had a modestly positive bias in recent dealings (10yr Sep futures up +04), which has likely spill over to JGB futures are the margin.

• JGB yields are firmer across the curve, with the back end outperforming. The 10yr was last at 1.48%, +2.5bps, while the 30yr was up over 3bps to 2.92%. The 2yr was +1bps last and just above 0.77%.
• Earlier we had Q1 GDP revisions, which were positive. Headline growth was revised to flat, versus -0.2%q/q initially reported. Private consumption was revised to a 0.1% gain, versus flat, but business spending was revised down a touch. Inventories were a stronger contributor at +0.6% (initially reported at +0.3%).
• JGB sentiment hasn't been shifted by the data.
• Later on we have the Eco Watchers survey, as well as a 6mth bill sale. 

CFTC positioning shifts were mixed across the major currencies in the week ending June 3, see the table below. For yen, we saw leveraged contracts rise, but this was offset by a contraction in asset manager positioning in the currency. Still, asset managers remain long from an outright standpoint, so too do leveraged players. 

• For EUR we saw little shift in the leveraged space (with an outright short still present), while asset managers added modestly to existing longs.
• GBP small net purchases for both asset managers and leveraged players. Assets managers are almost back to a net long position.
• AUD and NZD saw leveraged names add modestly to existing shorts. There was little net change in asset manager positioning for these currencies. 

Table 1: Weekly Change & Outright Positioning Per Major Currency - CFTC 

Source: Bloomberg Finance L.P. / MNI 

Gold prices fell on Friday after the better-than-expected US payroll data, which showed the labour market holding up in the face of elevated trade uncertainty and reducing the chance of a near-term Fed rate cut. They rose to a high of $3375.65/oz and then fell to a low of $3307.18 after the US release. It finished down 1.3% to $3310.42 as the stronger US dollar added pressure (USD BBDXY +0.3%) but was still up 0.6% on the week. Bullion is currently lower again at around $3310.7. 

• The moderate increase in gold over last week is consistent with the bullish theme remaining intact. Moving average studies remain in a bull-mode position. Initial resistance is at $3403.5, 5 June high, while initial support is at $3313.2, 20-day EMA.
• China increased its gold reserves again in May, the seventh consecutive monthly build, according to Bloomberg. The PBoC added 60k troy ounces.
• US-China trade talks are scheduled to take place in London on Monday and progress on an agreement is likely to be negative for gold as it would reduce uncertainty and the negative risks to global growth.
• Silver rose 0.9% to $35.98 on Friday to be up 9.1% last week and is currently around $36.02. These gains reinforce the impulsive bull wave. It continues to trade above the key bull trigger at $34.903.
• Equities rallied with the S&P up 1.0% and Euro stoxx +0.4%. The S&P e-mini is little changed so far in Monday’s APAC session. Oil prices rose sharply on Friday with Brent +2.0% to $66.65/bbl. Copper fell 2% and iron ore is lower at around $95/t.