AUD: AUD/EUR: Lowest Level Since October 2020

(MNI Australia) USD/CNH got above 6.8960 post the Asia close, before selling interest capped the move. Dips back to 6.8800 were supported and we currently track in the 6.8830/40 region. This left CNH 0.23% weaker for Monday's session. The CNY NEER also continued to track lower, down 0.24% to 125.22 (J.P. Morgan Index).

• Like elsewhere, the rebound in US yields (with the 2yr back close to 4%) weighed on CNH. USD/CNH is still broadly tracking yield differentials with the US at this stage.
• There was also underperformance by China in the equity space. The Golden Dragon Index fell 1.20% during US trade on Monday. This came after onshore equities lost ground yesterday (-0.36% for the CSI 300). There was modesty Northbound stock connect outflows for the second straight session.
• Premier Li Qiang stated China will open wider to the outside world and give space for offshore companies to develop locally, according to state TV. The Premier will also attend the Boao Forum in Hainan on March 30, with leaders from Singapore and Malaysia also in attendance.
• The other focus point late yesterday was the return of Alibaba co-founder Jack Ma to his home town of Hangzhou (Ma has largely been out of the public eye since late 2020). This caused a brief blip higher in Alibaba's share price but it wasn't sustained.
• A focus point for the market continues to be how the government will foster development of the private sector.

• RES 3: 97.185 - High Apr 5
• RES 2: 97.040 - High Aug 03
• RES 1: 96.900/905 - High Mar 24 / Mar 20
• PRICE: 96.740 @ 16:04 GMT Mar 27
• SUP 1: 95.675 - Low Oct 24
• SUP 2: 95.670 - Low Jun 17 and a key support
• SUP 3: 95.360 - 1.00 proj of the Aug - Oct - Dec price swing

Aussie 10y futures pressed higher again early Monday, keeping pressure on recent highs at the 96.905 mark. Further progress above this mark opens the Aug 03 highs of 97.040 and levels not seen since mid-August last year. On any resumption of weakness inside the recent range, key support opens at 95.675, the Oct 24 low and 95.670, the Jun 17 low, on the continuation chart.

The Australian Office of Financial Management (AOFM) will today sell A$150mn of the 0.75% 21 November 2027 Indexed Bond, issue #CAIN414. The line was last sold on 28 February 2023 for A$100mn. The sale drew an average yield of 0.9175%, at a high yield of 0.9200% and was covered 5.8500x. There were 47 bidders, 7 of which were successful and 5 were allocated in full. Amount allotted at the highest yield as a percentage of amount bid at that yield was 50.0%.

• The current inflationary environment should result in smooth enough takedown of today's auction, even after the RBA suggested that the inflation peak in Australia has been seen. That is despite worry surrounding the global banking sector and the threat of a general tightening in lending conditions, which would threaten to dent inflation.
• 5-Year breakevens have pulled back from YtD highs over the last month or so and now operate around the middle of the RBA’s 2-3% inflation target band, presenting a more attractive entry point for those worried about higher for longer inflation.
• Results due at 0100BST/1100AEDT.