AUD: AUD/USD - Support Around 0.6440-0.6450 Holds for Now
The AUD/USD has had a range today of 0.6438 - 0.6458 in the Asia- Pac session, it is currently trading around 0.6450, +0.15%. The AUD/USD has a little higher in a quiet Asian session as the market tries to digest the implications of the overnight price action in risk. This does not have a great smell and we are now sitting on some pivotal levels in global risk that if they give way will potentially signal a deeper pullback. The AUD/USD traded heavy overnight in sympathy to this backdrop and should risk actually break lower it would become vulnerable. The pair is probing its first support right here around the 0.6440-0.6450 area which has been pretty solid the last couple of months, through here and the focus will then turn to the pivotal 0.6350 support. On the day while risk remains under pressure and the AUD is capped below 0.6500-0.6525 I suspect rallies will be faded and the market will be looking to see if it can break this 0.6440-50 support properly to build for a move lower.
- MNI AU - Nov PMIs Up, Particularly Manufacturing, Services Jobs Moderates: Australian Nov preliminary PMIs saw improvement across the board, most notably for manufacturing. The manufacturing index rose to 51.6 from 49.7. We are still short of earlier 2025 highs around 53.0, but the turn around from Oct levels under 50.0 is notable. On the services side, we edged up to 52.7, from 52.5 prior. Again we remain off recent cycle highs, but it broadly suggests reasonably economic momentum for Q4. The composite index was at 52.6 from 52.1 in Oct. The data is second tier, but reinforces the RBA's on hold backdrop in the near term.
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6500(AUD2.28b). Upcoming Close Strikes : 0.6450(AUD991m Nov 26), 0.6500(AUD1.07b Nov 26), 0.6535(AUD1.69b Nov 26) - BBG
- The AUD/USD Average True Range for the last 10 Trading days: 47 Points
Fig 1: AUD/USD spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
BONDS: Closed With A Bear-Flattener, NZ-US 10Y Diff Looks Too Low
NZGBs closed showing a bear-flattener, with benchmark yields flat to 2bps higher.
- On a relative basis, the NZGB 10-year has underperformed its US tsy counterpart, with the NZ-US yield differential 2bps higher at flat. (see chart)
- A simple regression of the 1Y3M forward swap spread against the 10-year yield differential over the past 18 months suggests the current differential is 6bps below its estimated fair value of +6bp
- “NZ's central bank considered Hayley Gourley as a potential board member and recommended that option to the government before she was appointed to the MPC.” – BBG
- “NZ is relaxing climate reporting rules due to concerns over the cost to businesses, with companies listed on the NZX only having to provide disclosures if their market capitalisation is NZ$1 billion or more.” - BBG
- Swap rates closed little changed.
- RBNZ dated OIS pricing closed little changed across meetings. 25bps of easing is priced for November, with a cumulative 39bps by February 2026.
- The local calendar will be empty until next Tuesday's release of Filled Jobs data for September.
- On Thursday, the NZ Treasury plans to sell NZ$225mn of the 4.50% May-30 bond, NZ$175mn of the 4.25% May-36 bond and NZ$50mn of the 5.00% May-54 bond.
Figure 1: NZ-US 10-Year Yield Differential
Source: Bloomberg Finance LP / MNI
CHINA: Bond Futures Sideways on Quiet Day
- Given a modest injection in this morning's OMO, bond markets remain subdued today even as equity markets give back some of the gains from recent days.
- The 10-Yr bond future is flat at 108.12 remaining at the mid-point between the 100-day EMA and the 200-day EMA.
- The 2-Yr bond future is down -0.02 at 102.34 pushing further below all major moving averages.
- The 10-Yr CGB is stronger today, down -1bp at 1.82%
JGBS: Market Reacts Positively To Min. Kiuchi Comments
At the Tokyo lunch break, JGB futures are flat compared to the settlement levels but well off session lows.
- Headlines have crossed from Japan's Growth Strategy Minister Minoru Kiuchi. Kiuchi stated that the focus now is compiling an economic stimulus package, albeit with one eye still on fiscal discipline (DJ) (and diverse funding sources). Various ministers are being consulted, with a focus on helping tariff impacted sectors. Kiuchi stated that no timeline is set for when the economic package will be compiled. Early focus for markets for the new Takaichi regime is fiscal stimulus, in terms of size and how it will be funded (particularly with parallels drawn with the Abenomics-like policy set ).
- Cash US tsys are slightly richer in today’s Asia-Pac session after yesterday’s modest bull-flattener.
- Cash JGBs are flat to 2bps richer across benchmarks, with the 7-year and 20-year outperforming.
- The benchmark 30-year yield is 0.4bp lower at 3.125% versus the session high of 3.148%. Notably, the current yield is more than 20bps below the cycle high of 3.351%, hit shortly after Takaichi was announced as the LDP leader.
- Swap rates are little changed.
