AUD: Asia Wrap - Drifts Higher
The AUD/USD has had a range of 0.6469 - 0.6494 in the Asia- Pac session, it is currently trading around 0.6490. The AUD has drifted higher in a quiet Asian session +0.26%.
- AU Data - Westpac Lead Index Signals Slower Growth. The Westpac lead indicator fell 0.06% m/m in May after -0.01% but this resulted in the 6-month annualised rate falling to -0.08%, the weakest since September but importantly signalling that growth could ease to below trend over the second half of the year.
- (Bloomberg) -- “China is willing to enhance the level of trade and investment facilitation with Australia, Chinese Commerce Minister Wang Wentao says. China is willing to work with Australia to adhere to cooperation and openness, and not to engage in closed-door confrontation, Wang says.”
- The AUD failed miserably again to break above the 0.6550 area, with momentum stalling and the USD starting to bounce the probability of it moving to the bottom end of its range increases.
- Price remains in the 0.6350 - 0.6550 range for now, a sustained break above 0.6550/0.6600 is needed for the move higher to accelerate.
- Buyers should continue to be around on dips while the support in the AUD/USD holds, a close back below 0.6350 is needed to challenge the newly formed uptrend.
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6400(AUD321m). Upcoming Close Strikes : 0.6600(AUD 1.1b June 19)
AUD/JPY - Today's range 94.02 - 94.30, it is trading currently around 94.15.Choppy price action as the pair establishes a range between 92.00 - 96.00. A break back below 91.50/92.00 is needed to see the move lower regain momentum and the focus turn back to the year's lows again.
Fig 1: AUD/USD spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
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JPY: Asia Wrap - USD/JPY Demand Seen Sub 145.00
The Asia-Pac range has been 144.81 - 145.47, Asia is currently trading around 145.30. USD/JPY opened lower and traded heavily for most of our session on the back of a knee-jerk reaction lower in stocks to the downgrade news.
- MNI - China Data: “The April activity outcomes were mixed, with retail weaker than forecast, while IP posted a modest upside surprise. Both measures slowed versus March outcomes. Headwinds still persist in the property sector, while house price growth slipped further into negative territory.”
- "*ISHIBA: CAN'T ACCEPT US TARIFFS INCLUDING FOR CARS" - BBG
- JAPAN FINMIN KATO: JAPAN NOT FACING PROBLEM PROCURING FUNDS FROM MARKET VIA DEBT ISSUANCE, IF JAPAN LOSES MARKET TRUST IN ITS FINANCES, IT MAY FACE RISE IN INTEREST RATES THAT COULD AFFECT DEBT REDEMPTION" RTRS
- USD/JPY tested below 145.00 this morning as stocks turned down, some demand seen below 145.00 after the Japanese fix.
- The support around 144/145 looks important now and a break would once again bring the focus back to the pivotal 140.00 area. The price action though does not look great and the market is still more comfortable selling rallies..
Options : Closest significant option expiries for NY cut, based on DTCC data: Y141.90($1.07bln), Y147.00($969.6m), Y146.50($780.7m), Upcoming Strikes : 145.50($1.03b May 20), 145.00($789.7m May 20), 142.00($878m May21)
Fig 1 : USD/JPY Spot Daily Chart
Source: MNI - Market News/Bloomberg
STIR: RBA Dated OIS Pricing Firmer Ahead Of Tomorrow’s RBA Policy Decision
RBA-dated OIS pricing is flat to 2bps firmer across meetings today, with late 2025 / early 2026 leading, ahead of tomorrow’s RBA Policy Decision.
- A 25bp rate cut in May is given a 95% probability, with a cumulative 75bps of easing priced by year-end.
- Notably, today’s moves leave meetings pricing 4-44bps firmer than levels before the release of Q1 CPI data on April 30.
Figure 1: RBA-Dated OIS – Current Vs. Pre-Q1 CPI
Source: MNI - Market News / Bloomberg
NZD: Asia Wrap - NZD Drifts Higher
The NZD/USD had a range of 0.5875 - 0.5899 in the Asia-Pac session, going into the London open around 0.5890.
- MNI - China Data : “The April activity outcomes were mixed, with retail weaker than forecast, while IP posted a modest upside surprise. Both measures slowed versus March outcomes. Headwinds still persist in the property sector, while house price growth slipped further into negative territory.”
- The NZD/USD has held up pretty well considering the knee-jerk reaction lower in stocks to the downgrade news.
- The NZD now seems to be comfortable in a 0.5800/0.6050 range and awaits a catalyst to provide the impetus to break-out.
- The support back towards 0.5800 has held very well, and while this continues to hold expect buyers to be around on dips. The first target is the highs just above 0.6000, a break above here is needed to regain momentum.
- CFTC Data showed Asset managers continuing to build back their shorts, while the leveraged community continued to reduce their own short.
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.5915(NZD1.06Bln)
AUD/NZD range for the session has been 1.0872 - 1.0899, currently trading 1.0885. The Cross has found some supply just above 1.0900, support is seen back towards 1.0800. A sustained break above 1.0920 would turn the focus higher.
Fig 1: NZD/USD Spot Daily Chart
- Source: MNI - Market News/Bloomberg
