AUD: AUD/USD - Stalls Toward 0.7100 & Drifts Lower As Oil Moves Higher
The AUD/USD has had a range today of 0.7049-0.7089 in the Asia- Pac session, it is currently trading around 0.7050,-0.35%. The AUD has stalled toward 0.7100 and drifted lower as Oil moved up on reports of a tanker being hit off Kuwait and risk topping out. Still an Amazing comeback by risk in the current environment, I still remain wary though and would probably be skewed to fading rallies until we see an end to the conflict or the Strait of Hormuz being fully opened. On the day, I would be looking for sellers to return in the 0.7100-0.7120 area looking for risk to come back under pressure at some point. A sustained close back above 0.7120-0.7140 would see the downward pressure negated and the upward trend would likely be resumed.
- MNI AU - AU Jan Household Spending Lower Forecast, Y/Y Back Under 5%: Australia household spend for Jan was a little weaker than forecast. Spending appears to be moderating but from reasonable levels. The RBA is unlikely to be concerned and it may not prevent another rate hike, given still elevated inflation pressures and a tight labour market.
- MNI: Behind-Curve RBA To Wait Till May Before Hike-Ex Staffers. The Reserve Bank of Australia is likely to wait until May before lifting its cash rate from 3.85%, but could consider a larger 50-basis-point increase if the Iran conflict pushes oil prices higher and feeds into first-quarter CPI, especially with inflation already above the target band, former officials told MNI, warning that repeated forecast misses combined with an energy shock risk de-anchoring inflation expectations.
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6950(AUD943m), 0.7000(AUD1.5b), 0.7150(AUD1.38b). Upcoming Close Strikes : 0.7000(AUD957m Mar 9), 0.7050(AUD687m Mar 6) - BBG
- The AUD/USD Average True Range for the last 10 Trading days: 88 Points
Fig 1: AUD/USD spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
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JPY: USD/JPY - Treading Water On A 155 Handle
The USD/JPY range today has been 155.38 - 155.66 in the Asia-Pac session, it is currently trading around 155.50. USD/JPY has been doing some work between 154.50-156.00 as the USD continues to grind higher. CFTC data up until last Tuesday shows leveraged funds paring back large Yen shorts, this bounce back to 156 could provide decent levels to further reduce positioning for CTA/Momentum type players. In today's session, watch to see if these positions are further reduced into the 156.00 area. The juggernaut speed it was building to the topside looks to have been broken for now and we might need to consolidate and do some work before embarking on a clear trend again. What is clear though is that the price action had more to do with overextended positioning and after some consolidation the pressure against the Yen could be resumed at some point.
- “JAPAN ECONOMY MINISTER KIUCHI: THERE ARE PROS, CONS OF WEAK YEN, FX MOVES ARE DETERMINED BY VARIOUS FACTORS" RTRS
- "KATAYAMA: US, JAPAN WILL WORK IN LINE WITH FX JOINT STATEMENT. JAPAN, US WILL CONTINUE TO WORK CLOSELY ON FX. SHARE GENERAL VIEW ON FX WITH TAKAICHI" - BBG
- "JAPAN RULING LDP SET TO WIN MAJORITY IN LOWER HOUSE: KYODO POLL' - BBG
- Options : Close significant option expiries for NY cut, based on DTCC data: 155.75($876m), 158.50($442m). Upcoming Close Strikes : 153.00($1.59b Feb 5), 151.50($1.11b Feb 4) - BBG.
- The USD/JPY Average True Range(ATR) for the last 10 Trading days: 159 Points
Fig 1 : USD/JPY Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
JGBS AUCTION: Weakish Demand Metrics For 10Y Auction
The 10-year JGB auction delivered weakish results, with the low price failing to meet expectations at 98.75, according to the Bloomberg dealer poll. Moreover, the cover ratio decreased to 3.0196x from 3.3037x. The tail was unchanged 0.05.
- This performance came despite an outright yield hovering just below the cycle high, around 15bps higher than the level of last month's auction.
- The 2s/10s yield curve was also stepper last month’s auction, although around 20bps below its a cycle high.
- In early afternoon Tokyo trading, the cash 10-year and JGB futures are dealing little changed.
NZD: NZD/USD - Being Dragged Back Above 0.6000 By A Rampant AUD
The NZD/USD had a range today of 0.5995-0.6035 in the Asia-Pac session, it is currently trading around 0.6035. The NZD is being dragged back above 0.6000 by the AUD after the RBA raised rates. On the day, the first support around 0.5980-0.6010 continues to hold up pretty well for now, through here and the next level is 0.5900-0.5950. I was surprised by the CFTC data as the price action suggested there had been much more paring back of shorts, but the bears continue to hold on. This positioning I suspect could see dips continue to be supported for now and a break back above 0.6100 could provide the catalyst to get out.
- Bloomberg - “New Zealand’s home-building approvals fell 4.6% m/m in December, according to Statistics New Zealand. Following a revised 2.7% gain in November, approvals for stand-alone houses fell 6% m/m.”
- CFTC Data up to 27/01/2026 shows Asset Managers paring back their short positions in the NZD, -40930(Last -52099). The Leveraged community surprisingly added back to their own shorts which they had just started to wind down, -11658(Last -5119).
- Options : Closest significant option expiries for NY cut, based on DTCC data: none. Upcoming Close Strikes : 0.5975(NZD746m Feb 4) - BBG
- The NZD/USD Average True Range for the last 10 Trading days: 61 Points
Fig 1: NZD/USD Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
