AUD: AUDJPY Approaching March Highs Following RBA Surprise
Jul-08 09:46
- Despite Monday’s steady move lower for AUDUSD as renewed tariff concerns filtered through to higher beta FX, today’s RBA surprise and subsequent spike higher to 0.6558 fully reversed the week’s decline. The pair has since settled around the 0.6540 mark amid a more stable equity backdrop, and it is worth noting we have ~400mln of 0.6545 expiries rolling off at today’s NY cut.
- This AUDUSD bullish trend set-up is maintained, with the latest pullback considered technically corrective. Moving average studies remain in a bull-mode position, highlighting a dominant uptrend, and scope is still seen for a climb towards 0.6603 next, the Nov 11 high. Initial firm support to watch is 0.6472, the 50-day EMA.
- Standing out on the chart is AUDJPY, which returns to an important area of resistance around 95.75 which aligns with the March and May highs from earlier in the year. Should major equity indices positively navigate the first major tariff deadline this week, the cross could see further upside targeting a move towards the February highs at 97.33. Uncertainty regarding a US/Japan trade deal and a market that remains long JPY could strengthen a short-term extension of the rally.
- Concerns over stubborn domestic inflation led the RBA board to keep the cash rate at 3.85%, in a 6-3 split decision that defied market pricing. Governor Bullock was unapologetic following the call, noting the Reserve had limited ability to influence market pricing ahead of the decision, largely due to the new board voting structure.
Source: Bloomberg Finance L.P. / MNI
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JGB TECHS: (M5) Rallies Off Lows
Jun-06 22:45
- RES 3: 147.74 - High Jan 15 and bull trigger (cont)
- RES 2: 146.53 - High Aug 6
- RES 1: 141.48/142.95 - High May 2 / High Apr 7
- PRICE: 139.19 @ 15:53 GMT Jun 06
- SUP 1: 138.54 - Low May 22
- SUP 2: 136.57 - 1.382 proj of the Jan 28 - Feb 20 - Feb 26 bear leg
- SUP 3: 134.89 - 2.000 proj of the Jan 28 - Feb 20 - Feb 26 bear leg
JGBs have rallied off recent lows, however a bearish theme remains intact following the reversal that started Apr 7. A continuation lower would signal scope for an extension towards 136.57, a Fibonacci projection. On the upside, a reversal higher would instead refocus attention on 142.95, the Apr 7 high. The first important resistance to watch is 141.48, the May 2 high. A break of this level would be viewed as an early bullish signal.
US TSYS/SUPPLY: MNI UST Issuance Deep Dive: June 2025
Jun-06 21:24
We've just published our UST Issuance Deep Dive - Download Full Report Here
- May’s refunding round saw guidance as well as coupon sizes for the current quarter unchanged.
- The August round (Jul 28-30) could prove more compelling, reflecting both pressure at the long end of the Treasury curve as well as a shifting fiscal outlook amid tariff revenues contrasted with impending tax cuts (not to mention the likelihood of approaching the debt limit at around that time if it’s not lifted).
- Future Coupon Upsizing: We’ve seen some expectations that Treasury could lean against some of those trends in the August refunding, with potential signals if not immediate action on adjusting buybacks or even reducing issuance duration in order to reduce pressure on the long end. MNI’s current expectation is that coupon sizes will only be increased in early 2026. We will update in our next Deep Dive at end-June, with our full refunding preview coming in late July.
- Upcoming issuance: June is set to see $315B in nominal Treasury coupon sales, in addition to $23B in 10Y TIPS and $28B FRN for a total of $366B. Sales for the month start in the coming week, on Tuesday June 10 with $58B of 3Y Note, Wednesday June 11 with $39B of 10Y Note, and Thursday June 12 with $22B of 30Y Bond.
- May Auction Results: Against a backdrop of continued steepening pressure for global sovereign curves, May’s coupon auctions saw strong sales at the short-end/belly contrasted with tails at the long-end.
US FISCAL: Extraordinary Treasury Measures Tick Up As Cash Depletes
Jun-06 20:20
Treasury had $84B in "extraordinary measures" available to keep the government financed as of June 4 per a release Friday. That is up from $68B a week earlier though Treasury has exhausted three-quarters of the total initially available ($362B) when the debt limit impasse began in January.
- Combined with a pullback in Treasury cash ($376B), the total resources available to avert an "x-date" in the summer are down to a total $460B, the lowest since April 10 before the annual tax take accelerated.
- There will be another uptick in Treasury cash late next week/early the following week around the mid-June tax date, but this is likely to be the last major uplift before the summer at which point x-date speculation will pick up if Congress hasn't passed a debt limit increase by then.
