AUSSIE BONDS: ACGB May-32 Auction Result

The BBDXY range overnight was 1201.92 - 1210.51, Asia is currently trading around 1208, +0.07%. The USD has again found some solid demand around the 1200 area and is again attempting to bounce higher off this base. A sustained break below 1197/1195 is needed to regain the momentum lower and retest the year's lows. The USD is looking comfortable for the moment above this support, not sure we get any clear direction though until the market sees what the NFP print is.

• Robin Brook on X: “The US Dollar has been essentially unchanged for 5 months now. This doesn't get talked about much, as it doesn't fit the consensus narrative, which is still very Dollar negative. But - as I have been saying for a long time - the Dollar fall is over...” 
• Bloomberg - “Reports of Dollar’s Demise Seem Greatly Exaggerated. Pessimism surrounding the dollar may have already peaked, with the currency trading more or less back in line with fundamentals. It’s still premature to call a turnaround in the short term, but the fading risk premium suggests that the most acute phase of selling is over.”
• “Risks to Dollar Assets Arise From China’s New Bloc, Chip Curbs. Dollar assets face increasing structural headwinds as China’s efforts to build non-Western capital channels and strategic resource alliances create an alternative to US liquidity. It’s a scenario that risks leading to higher term premiums for Treasuries, as well as a pullback in demand for trade clearance that would weaken the structural support for the dollar.” - BBG
• Data/Events : MBA Mortgage Applications, Wards total Vehicle Sales, JOLTS, Factory Orders, Durable Goods Orders, Fed Beige Book

Fig 1: BBDXY Daily Chart

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

• Vietnam's August Manufacturing PMI slipped to +50.4 from +52.4 in July.
• Output declined to +52.36 from +55.5 prior
• New orders were down relative to the prior month. 

The S&P Global PMIs across ASEAN generally showed growth in activity in the sector in August with all countries positive except Malaysia. As a result, the aggregate ASEAN PMI rose to 51.0 last month up from 50.1, the highest since February, as moderately higher new orders drove production higher. But there are signs that businesses remain cautious. 

• In July, business confidence fell to a 5-year low but improved sharply in August to its best since March but still below the historical average, according to S&P Global. But optimism regarding the outlook was not strong enough for firms to hire and staffing was reduced for the fifth straight month, although at a slower pace.
• New orders grew for the first time after contracting for 4 months.
• Input costs continued to rise but at a slower pace than in July. These were passed onto customers though with selling price inflation at its highest since end-2024.
• In August, Thailand showed the strongest manufacturing growth with the PMI up to 52.7, followed by Indonesia at 51.2, Singapore 51.2, Philippines 50.8, Vietnam & Mynamar 50.4, and Malaysia close to the neutral 50 at 49.9.

ASEAN S&P Global Manufacturing PMI sa