US TSYS: Asia Wrap - TYU5 Slightly Higher
Jun-19 04:18
The TYU5 range has been 110-23+ to 110.30 during the Asia-Pacific session. It last changed hands at 110-27+, up 0-02 from the previous close.
- Cash Market Closed
- (Bloomberg) -- “Macquarie Group moved its forecast for the next Federal Reserve interest-rate cut to December, after previously seeing no reductions this year. The firm now sees one cut in 2026, also by a quarter-point. “We continue to anticipate 50 bps of cuts ahead, but bring forward our timing slightly. Tolerance for higher core PCE could pave the way for a 2025 cut.”
- “The willingness of FOMC participants to continue to project 50 bps of cuts despite projecting more elevated core PCE inflation leads us to shift our baseline view for the timing of rate cuts ahead.”
- “Foreign investors' holdings of US Treasuries totaled $9.01 trillion in April, the second-highest figure on record, despite market turmoil.”(BBG)
- The 10-year yield continues to find decent supply back towards its 4.30/35% support, this area needs to hold if yields are to move higher. The range looks to be 4.30% - 4.60% for now a break either side would provide a clearer direction.
- Data/Events: Philadelphia Fed Business Outlook, Leading Index
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CHINA: Bond Futures Down Modestly
May-20 04:16
- China's bond futures are down modestly today across all maturities.
- The 10YR is down -0.02 at 108.78 and maintains its position at the mid-point between the 20-day EMA of 108.85 and the 50-day EMA of 108.71
- The 2YR is down -0.03 at 102.35 and remains well below all major moving averages. The nearest being the 20-day EMA of 102.50.
- China's 10YR government bond is higher in yield by +1bp at 1.66%
- China announced a cut in their loan prime rates today by -10bps as expected by the market.
STIR: RBA Dated OIS Pricing Softer Ahead Of Today’s RBA Policy Decision
May-20 04:16
Figure 1: RBA-Dated OIS - Today Vs. Prior
Source: MNI - Market News / Bloomberg
NZD: Asia Wrap - NZD Drifts Lower
May-20 04:09
The NZD/USD had a range of 0.5913 - 0.5932 in the Asia-Pac session, going into the London open around 0.5920. US Stocks have drifted lower today, paring back a little of their overnight gains.
- US President Trump has had a two hour conversation with Russian President Putin about the war in the Ukraine. Trump said that he believes that Putin wants peace. While he said that peace talks would begin "immediately", it remains unclear what the next steps will be, especially as the unconditional 30-day ceasefire was not discussed between the two leaders.
- The NZD/USD traded closely with US stocks, paring back some overnight gains before demand was seen again back towards 0.5900.
- 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.
- Options : Closest significant option expiries for NY cut, based on DTCC data: none, Upcoming Strikes : 0.5705(NZD805.1m May 23), 0.6150(NZD356.1m May 23)
- AUD/NZD range for the session has been 1.0880 - 1.0897, 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.
