AUD: AUD/USD - Holds Above 0.6600, Looking To Test 0.6630
The AUD/USD has had a range today of 0.6605 - 0.6618 in the Asia- Pac session, it is currently trading around 0.6615, +0.05%. The AUD/USD continued to consolidate above 0.6600 in a quiet Friday session. There was not the same pushback by the PBOC today on the China fix so the USD traded slightly softer. The AUD price action remains very constructive and indicative of a market with solid buying interest. On the day, I suspect dips back toward the 0.6560-0.6580 area should continue to be supported. The AUD is now looking to build some momentum to once again test the top end of its recent range, a break of 0.6630 is needed to look toward the 0.6700 area.
- MNI: Future RBA Adjustments Seen As Minor Tweaks To 3.6% Rate. Any adjustment to the Reserve Bank of Australia’s cash rate would only be a minor policy tweak rather than a fundamental shift and would likely be driven by short-term inflation pressures in 2026, former RBA economists told MNI.
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6500(AUD1.11b), 0.6600(AUD487m). Upcoming Close Strikes : 0.6475(AUD814m Dec 8 ) - BBG
- The AUD/USD Average True Range for the last 10 Trading days: 34 Points
Fig 1: AUD/USD spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
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BONDS: NZGBS: Richer But NZ-US10Y Diff Wider
NZGBs closed 2-3bps richer, but with the NZ-US 10-year yield differential 2bps wider at +2bps. (see chart)
- NZ's jobless rate held steady at 5.3% in the third quarter, matching economist expectations. Employment was unchanged quarter-on-quarter, compared with a revised 0.2% fall in the previous quarter, while employment declined 0.6% year-on-year, a smaller drop than in the second quarter. The labour force participation rate was 70.3%.
- Average hourly earnings rose 0.7% from the previous quarter, and non-government wages increased 0.4% including overtime and 0.5% for ordinary time.
- Swap rates are 2-3bps lower, with the 2-year rate rejecting off the 20-day EMA.
- RBNZ dated OIS pricing is slightly softer across meetings. 26bps of easing is priced for November, with a cumulative 33bps by February 2026.
- Tomorrow, the local calendar will see the RBNZ at the Select Committee to discuss the FinStab Report, and the Government will release its 3-Month Financial Statements.
- Also tomorrow, the NZ Treasury plans to sell NZ$225mn of the 3.00% Apr-29 bond, NZ$175mn of the 4.50% May-35 bond and NZ$50mn of the 5.00% May-54 bond.
Bloomberg Finance LP
JGBS AUCTION: Poor To Mixed Demand Metrics For 10Y Auction
The 10-year JGB auction delivered weak to mixed results, with the low price failing to meet expectations at 100.34, according to the Bloomberg dealer poll. Moreover, the cover ratio decreased to 2.9734x from 3.3356x. However, the tail shortened to 0.13 from 0.19.
- This performance came with an outright yield around the same level as last month and approximately 5bps below the cyclical high of 1.705% set last month.
- The 2s/10s and 7s/10s yield curves were also around similar levels as last month.
- Last month’s 10-year JGB auction delivered weak results, with the low price failing to meet expectations at 100.49, according to the Bloomberg dealer poll. Moreover, the cover ratio decreased to 3.3356x from 3.9156x, and the tail lengthened to 0.19 from 0.06.
- In early afternoon Tokyo trading, the cash 10-year and JGB futures are dealing slightly weaker.
JGBS AUCTION: 10-Year JGB Auction Results
The Japanese Ministry of Finance (MoF) sells Y 2,064.5bn 10-Year JGBs:
- Average Yield: 1.658% (prev. 1.635%)
- Average Price: 100.35 (prev. 100.55)
- High Yield: 1.674% (prev. 1.657%)
- Low price: 100.22 (prev. 100.36)
- % Allotted At High Yield: 67.9818% (prev. 9.1993%)
- Bid/Cover: 2.9734x (prev. 3.3356x)
