AUSSIE BONDS: ACGB Mar-36 Auction Result

The AUD/JPY range Friday night was 107.70-108.71, Asia is currently trading around 108.15. The pair’s move lower has finally slowed as some demand returns around the 108.00 area. Risk stabilised on Friday and with the US and China out I suspect we have a quiet start to the week. AUD/JPY is up in rarified air so some prudence is warranted up here, we have to go back to 1990 for the last time this pair was above 110.00. For now though technically the trend remains up, even though we are seeing the first signs of some exhaustion. On the day, the first resistance is back toward the 108.50-108.80 area and we are currently sitting right on the support around 108.00. A break below 108.00 potentially signals a deeper pullback toward the more important 106.50 area.

• The AUD/JPY Average True Range(ATR) for the last 10 Trading days: 117 Points

Fig 1: AUD/JPY spot Daily Chart

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

The S&P(ESH6) Friday night range was 6808.75 - 6897.75, SPX closed +0.05%, Asia is currently trading around 6854. The S&P(ESH6) chopped sideways as risk stabilised into the weekend and the inflation data came in pretty benign. The stock market continues to look stretched up here but recently these dips have been strongly supported so it has not paid to chase them, at some point this will change. US Yields continue to move lower so the market believes we will get cuts sooner than later. This morning futures have opened a little higher, E-minis(S&P) +0.05%%, NQZ5 +0.05%. On the day, it should be quiet with both the US and China out, the market continues to chop wildly sideways for the moment in this 6700-7050 range, albeit with a heavy tone for the moment. The first resistance is back toward the 6910-6940 area, the bears will be hoping for a test of the 6700-6750 support, a break of which could signal a deeper pullback toward 6500. Only a sustained close back through 6500 would see the strong uptrend potentially challenged.

• Oguz Erkan on X: “Dario Amodei perfectly explains why $ORCL and OpenAI are in a very risky position. He says you can commit to buying $5 trillion worth of compute if you are projecting a $1 trillion revenue run rate. If you achieve $800 billion, it’ll still be staggering, but the company will go bankrupt. This is the risk OpenAI is facing. If its revenue projections are off even by a bit, it will struggle meeting its commitments. And that will directly affect $ORCL as most of its backlog is from OpenAI.”   https://x.com/oguzerkan/status/2022569086467686875?s=20
• Holger Szchaepitz on X: “The AI-driven productivity take-off may finally be visible, Erik Brynjolfsson says. New data released this week challenges the narrative that artificial intelligence has yet to meaningfully impact the broader US economy. While earlier reports pointed to steady job growth, revised figures show that payroll gains were marked down significantly. Importantly, this revision came even as real GDP remained strong. Producing more output w/fewer workers is the classic signature of rising productivity. Brynjolfsson estimates US productivity growth at around 2.7% for 2025 – nearly double the sluggish 1.4% annual avg of the past decade. ft.com/content/4b51d0” See Graph below.
• SpotGamma on X: “ The S&P 500 may appear calm on the surface, yet index-stock dispersion has increased dramatically and SPX has now slipped below the critical 6,900 level. With put skew rising and VIX expiration ahead, volatility risk is building.”
• The S&P 500 Index Average True Range(ATR) for the last 10 Trading days:  95 Points

Fig 1: Payrolls Revised Down

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

• MNI JAPAN Q4 REAL GDP +0.1% Q/Q; MNI MEDIAN +0.5%
• JAPAN Q4 REAL GDP +0.2% ANNUALIZED; MNI MEDIAN +2.0%
• JAPAN Q4 GDP POSTS FIRST GROWTH IN TWO QUARTERS
• JAPAN Q4 CONSUMPTION +0.1% Q/Q; +0.1 PP CONTRIBUTION
• JAPAN 2025 GDP RISES 1.1% Y/Y VS. -0.2% IN 2024