AUD: AUD/USD - Trades Heavy Around 0.6600 As Risk Wobbles
The AUD/USD has had a range today of 0.6593 - 0.6612 in the Asia- Pac session, it is currently trading around {AUDUSD Curncy}. The bounce in AI lasted 1 day and is lower again, the move is starting to turn ugly as sentiment is quickly changing. The NASDAQ and the S&P both look to potentially be putting in double tops and the likes of Nvidia is approaching some pivotal levels as well. This does not augur well for risk and creates significant headwinds for the AUD which trades with a high correlation to it. The AUD price action for the moment remains consolidative, but I do remain wary of what seems to be unfolding in US stocks. Technically while the AUD remains above 0.6500-0.6550 dips should continue to be supported. Watch to see if this 0.6600 area can continue to hold in the face of this souring in sentiment, if not we could see a deeper pullback towards the 0.6500-50 support. On the day I suspect sellers would be looking to fade a bounce back toward the 0.6625-0.6645 area initially looking to see if we can break back below 0.6590-0.6600.
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6550(AUD1.07b), 0.6625(AUD849m), 0.6675(AUD989m). Upcoming Close Strikes : 0.6675(AUD1.31b Dec 19), 0.6700(AUD1.57b Dec 19) - BBG
- The AUD/USD Average True Range for the last 10 Trading days: 40 Points
Fig 1: AUD/USD spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
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BONDS: NZGBS: May-36 Yield Finishes At Low After Tap
NZGBs closed showing a twist-flattener, with benchmark yields 1bp higher to 3bps lower.
- NZGBs held by international investors increased to 60.3% in October from 59.6% in September.
- RBNZ Business Expectations Survey for Q4 showed the weighted mean 1-year ahead inflation expectation falling to 2.42% from 2.53% in Q4. 2-year declines to 2.39% from 2.64% - BBG
- NZ Treasury issued NZ$6bn of May 2036 nominal NZGB after a syndicated tap. The issue was capped at NZ$6bn, with a total book size at final price guidance at NZ$24.8bn. It was priced at 12bps over the May 2035 nominal bond to yield 4.34%. JLM: ANZ Bank New Zealand, JPMorgan Securities Australia, UBS AG, Australia Branch and Westpac.
- Inflation-adjusted New Zealand existing home sales average price NSA fell 4.2% in October from the same period last year, according to Bloomberg calculations using official data.
- Swap rates closed little changed.
- RBNZ dated OIS pricing closed little changed across meetings. 25bps of easing is priced for November, with a cumulative 33bps by February 2026.
- Tomorrow, the local calendar will see PPI data.
Bloomberg Finance LP
JGBS: Long-End Remains Pressured At Lunch Ahead Of PM/BOJ Meeting
At the Tokyo lunch break, JGB futures are weaker, -9 compared to settlement levels.
- "Japanese Prime Minister Sanae Takaichi is set to meet with Bank of Japan Governor Kazuo Ueda on Tuesday as she mulls support for an economy that shrank over the summer. The two will meet at 3:30 p.m. in Tokyo, according to the prime minister's office. The meeting comes after a report showed the Japanese economy contracted in the three months through September on a US tariff-linked slump in exports and a sharp drop in property buying." - BBG
- Cash US tsys are 1-2bps richer, with a steepening bias, in today's Asia-Pac session.
- Cash JGBs are 1bp richer to 5bps cheaper across benchmarks, with a steeper curve. The benchmark 20-year yield is 3.4bps higher at 2.785%, a fresh cycle high, ahead of tomorrow's supply. (see chart)
- The 20-year JGB is at a similar valuation to last month in terms of the 10/20/30 butterfly.
- Swaps have twist-steepened, with rates 1bp lower to 5bps higher.
Source: Bloomberg Finance LP
CRYPTO: Bitcoin - Breaks Overnight Lows & Is Looking To Test The $90k Support
Bitcoin continues to trade very heavy in the Asian session, breaking the overnight lows and now having a look toward the pivotal $90k area. If this break is sustained it could signal an even deeper pullback toward the $65k-$75k area. {XBTUSD Curncy}
Fig 1: Bitcoin spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
