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• Gold slowly lost ground throughout the trading day as momentum in equities saw key indexes higher.
• Overnight the latest CPI print in the US was softer, giving hope for rate cuts and pushing the USD dollar lower.  It is likely that the impact of tariffs is yet to be felt in CPI prints and forecasters remain cautious on the data.
• With limited key data in Asia today, gold took its lead from the equity move and is down -0.77% at US$3,226.46.
• Gold remains at the mid-point between the 20-day EMA of $3,272.69 and the 50-day EMA of $3,166.88
• UBS Group AG’s rich clients are increasingly shifting away from US-dollar assets, turning instead to gold, crypto and investments in China, according to the Swiss bank’s co-head of wealth management for Asia.

TYM5 is dealing at 110-04, +0-05 from closing levels in today's Asia-Pac session. 

• According to MNI’s technicals team, Treasury futures maintain a softer tone following recent weakness. Support at 110-01+, a Fibonacci retracement point, has been broken. Clearance here strengthens a bearish theme and exposes a key support at 109-08, the Apr 24 low. Key near-term resistance has been defined at 111-22, the May 7 high. A break of this level is required to signal a potential reversal.
• There has been no net movement in cash US tsys in today's Asia-Pac session after being little changed yesterday following the tame April CPI report.
• The 10-year yield range seems to be 4.10% - 4.50%, with the yield currently testing the upper bound of this range. A sustained break above this level would see another round of selling targeting the 4.75% area.
• Data: US MBA Mortgage Applications

RBNZ-dated OIS pricing is flat to 3bps firmer across meetings today, leaving rates 2–14bps above levels seen prior to the Q1 CPI release on April 17.

• Q1 New Zealand CPI came in hotter than expected at 0.9% q/q, lifting the annual rate to 2.5% from 2.2% in Q4. Both tradeables and non-tradeables components contributed to the upside surprise.
• However, the RBNZ’s preferred measure of underlying inflation—the sectoral factor model—edged lower to 2.9% in Q1, down from a downwardly revised 3.0% in Q4. This marks the lowest print since Q2 2021 and places core inflation just under the top of the RBNZ’s 1–3% target band.
• In Australia, Q1 headline and underlying CPI exceeded expectations by 0.1pp, although the trimmed mean slowed to 2.9% y/y, falling within the RBA’s target band for the first time since Q4 2021.
• For comparison, RBA-dated OIS pricing is now 4–40bps firmer than pre-Q1 CPI levels recorded on April 30.

Figure 1: RBNZ Dated OIS Current vs. Pre-CPI Levels (%)

Source: MNI - Market News / Bloomberg