AUSSIE BONDS: ACGB Jun-35 Auction Absorbed With Less Demand Present

•  The PBOC issued CNY98.5 bn of 7-day reverse repo at 1.4% during this morning's operations.
• Today's maturities CNY365.3 bn
• Net liquidity injection CNY266.8bn.
• The PBOC monitors and maintains liquidity in the interbank system through the issuance of reverse repo.
• The CFETS Pledged Repo Deposit Institutions 7 Day Weighted is at 1.41%, from prior close of 1.54%.
• The China overnight interbank repo rate is at 1.38%, from the prior close of 1.29%.
• The China 7-day interbank repo rate is at 1.55%, from the prior close of 1.55%.

CFTC data out for last week shows both Asset Managers and Leveraged Funds added to their AUD short positions, given how poorly the USD is trading one would expect most of these shorts are being expressed in the crosses. The AUD performance in the crosses was mixed overnight bouncing against the CAD but it continues to underperform for now against the EUR and to a lesser extent the GBP.

• EUR/AUD - Overnight range 1.7886 - 1.7964, Asia is currently trading around 1.7940. The pair again found some supply back towards the 1.8000 area overnight, it has had a good run higher but how the AUD/USD trades through 0.6550/0.6600 will be key. First support seen back towards the 1.7800 area, a break above 1.8000 and the move could extend higher.
• GBP/AUD - Overnight range 2.0864 - 2.0928, Asia is trading around 2.0895. This pair continues to meet supply towards the multiple tops above 2.1000. A sustained break above 2.1050 is needed to see the move higher regain momentum, like EUR/AUD though a more positive risk backdrop and the AUD/USD potentially breaking higher could potentially see this pair back off and move towards the lower end of its 2.0500 -2.1050 range.
• AUD/JPY - Overnight range 93.97 - 94.56, Asia is trading around 94.45. Choppy price action as the pair establishes a range between 92.00 - 96.00. Momentum higher seems to be stalling, a break sub 0.9350 would be needed to see the focus turn lower once more.
• AUD/NZD -  Overnight range 1.0766 - 1.0798, the cross is dealing in Asia around 1.0780. The cross is struggling to get any momentum for now. It looks to be in a 1.0750 - 1.0850 range for now as it awaits a catalyst to provide some direction.

Fig 1: AUD/CAD spot Weekly Chart

Source: MNI - Market News/Bloomberg Finance L.P

• CHINA PBOC CONDUCTS CNY98.5 BLN VIA 7-DAY REVERSE REPO WEDS