FOREX: Antipodean Wrap - NZD Leading The Correction Lower
The Asian session tried to run with the moves from overnight with both the AUD and NZD making new lows before bouncing back with only the NZD ending marginally down on the day. Commerce Secretary Lutnick said trade deals with South Korea and Japan would take significantly more time than the agreement with the UK, if so how long does that imply a US-China deal could take ? China’s Vice Foreign Minister Hua made some comments: "What the United States is doing cannot be sustained," Hua said. "Ordinary people in the U.S. already feel suffering from the tariff war."
- AUD/USD - Asian range 0.6371 - 0.6405, the AUD is currently dealing around 0.6400. Price is testing the intra-day support just below 0.6400, decent option interest around expiring tonight. A break below 0.6300 needed to reverse direction.
- AUD/JPY - Asian range 93.00 - 93.43, price goes into London trading around 93.25. Price continues to stall back towards the resistance seen around 94.00, a break needed to have a look back at longer-term resistance towards 95.00/9600. Support seen back towards the 91.50/92.00 area.
- NZDUSD - Asian range 0.5871 - 0.5908, going into London trading around 0.5895. The NZD slipped below its lows going back to 16th April having a look at what stops might be lurking, it has since bounced back. The bigger Long-term support lies back towards 0.5800/50.
- AUD/NZD - Asian range 1.0833 - 1.0865, the Asian session is currently trading 1.0865. Price is pushing through the resistance around 1.0850 as the NZD underperforms, can it hold under 1.0900 ?
Fig 1 : NZD/USD Spot Hourly Chart
Source: MNI - Market News/Bloomberg
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AUD: AUD/USD - Struggles To Stay Below 0.6000
After opening very heavy and making new lows to 0.5915 the AUD has bounced back to 0.6000 as the USD gives back some of its overnight gains. This is striking as US treasuries yields continue to tear higher touching 4.37% in Asia.
- The Asian range has been 0.5915 - 0.6002.
- Very interesting price action today with risk under pressure and US yields higher. Amazingly the AUD has had a decent bounce and is struggling to maintain a foothold sub 0.6000.
- 650m 0.5975 expiring today
- The AUD has been trading poorly across the board in recent days reflecting the markets negative sentiment, the price action today though seems to imply someone is taking advantage of cheap levels and taking some off the table.
- While global markets remain under pressure the AUD will find supply on bounces, expect levels around 0.6100/0.6200 to find resistance.
- Data : FOMC minutes
AUDUSD
Source: MNI - Market News/Bloomberg
ASIA STOCKS: Huge Outflows Across Major Markets.
With further tariff headlines spooking markets, data shows that the ongoing outflows from Asia equities continue.
- South Korea: Recorded outflows of -$483m as of yesterday, bringing the 5-day total to -$4,987m. 2025 to date flows are -$10,565, m. The 5-day average is -$997m, the 20-day average is -$260m and the 100-day average of -$154m.
- Taiwan: Had outflows of -$887m as of yesterday, with total outflows of -$411m over the past 5 days. YTD flows are negative at -$17,843. The 5-day average is -$82m, the 20-day average of -$397m and the 100-day average of -$243m.
- India: Had outflows of -$1,041m as of 7th, with total outflows of -$2,617m over the past 5 days. YTD flows are negative -$15,414m. The 5-day average is -$523m, the 20-day average of -$24m and the 100-day average of -$151m.
- Indonesia: Had outflows of -$228m as yesterday, with total inflows of -$32m over the prior five days. YTD flows are negative -$2,058m. The 5-day average is -$6m, the 20-day average -$36m and the 100-day average -$35m
- Thailand: Recorded outflows of -$71m yesterday, totaling -$230m over the past 5 days. YTD flows are negative at -$1,402m. The 5-day average is -$46m, the 20-day average of -$32m the 100-day average of -$19m.
- Malaysia: Recorded outflows of -$89m as of yesterday, totaling -$422m over the past 5 days. YTD flows are negative at -$2,664m. The 5-day average is -$84m, the 20-day average of -$67m the 100-day average of -$39m.
- Philippines: Saw outflows of -$7m as of yesterday, with net outflows of -$83m over the past 5 days. YTD flows are negative at -$292m. The 5-day average is -$17m, the 20-day average of -$3m the 100-day average of -$6m.
CHINA: Bond Futures Rally as Equities Decline Again.
- As equities head lower again today, bond futures are up across all maturities.
- The 10YR bond future is up +.13 at 109.07 as it trades further away from the nearest moving average; the merged 20-day and 50-day EMA of 108.18.
- The 2YR bond future is up+0.03 at 102.63, as it breaks back above all major moving averages with today’s move. Its nearest moving average is the 100-day EMA at 102.60.
- China’s 10YR government bond yield is declining further, down -2bps at 1.64%
