CNH: Breaks Above 20-day Support, On USD Gains, 50-day EMA Near 6.8700, PMIs Due

• RES 3: 133.15 - High Feb 24 ‘26
• RES 2: 131.85 - 50-dma (cont)
• RES 1: 131.80 - 38.2% retracement of the Feb - Mar Bear Leg
• PRICE: 130.34 @ 16:01 GMT Mar 30
• SUP 1: 129.82 - Low Mar 27
• SUP 2: 129.57 - 1.0% 10-dma envelope
• SUP 3: 129.06 - 1.500 proj of the Aug 6 ‘24 - Mar 26 - Apr 7 ‘25

JGBs were pressured to fresh lows Friday, breaking below the 130.00 handle in the process. This keeps the price well through the 50-dma and reinforces the negative outlook. Clearance back above this level is needed to highlight a stronger short-term reversal and signal scope for any recovery. Interim supports rest at 129.57 and below at 129.06.

Aussie bond futures are rising in the first part of Tuesday trade, after a strong lead from UST futures in Monday trade. 3yr (YM) are up +3bps to 95.285, while the 10yr (XM) is +3.5bps to 94.93. On-going risk aversion in the equity space, with US markets reversing lower as Monday trade unfolded supported UST futures, while balanced comments from US Fed Chair also impacted. "I think a situation like the present situation where there's sort of downside risk to the labor market, which suggests keep rates low, but there's upside risk to inflation, which suggests maybe don't keep rates low, you've got tension between the two objectives," Powell said. Market pricing around year end Fed levels sits back around 3.61%, ended last week close to 3.70%.

• For 3yr bond futures, resistance to watch has shifted lower, with 95.653 representing the 23.6% retracement for the downleg posted off the October high on the continuation contract. A clear break of it would signal a short-term reversal. The bear mode set-up in MA studies is
  highlighting a dominant downtrend.
• ACGB yields are around 2.5-3.5bps lower across the benchmarks. The 3yr near 4.68% remains above all key EMAs (the 20-day is around 4.60%), for the 10yr, which currently tracks close to 5.03%, the equivalent support is at 4.96%.
• The 3/10s curve is fairly steady so far today at +35bps.
• Today the focus will be on the RBA's March meeting minutes. They will be examined for further Board thoughts on the consequences on inflation and growth of hostilities in the Middle East and subsequent jump in fuel prices. A lot can happen geopolitically before the next decision on 5 May and the market currently has a significant chance of another hike priced in.

• Gold fought back from lows of US$4,420 during the US trading day to finish around the intra-day highs at US$4,510.
• The move back above $4,500 may prove significant as buyers emerged below that level - potentially signally technical resistance
• Gold found further support after Chair Powell suggested the Fed would look through the current energy-led inflation spike. By framing high oil prices as a one-time event, he cooled expectations for a panic rate hike, which allowed gold to breathe as the USD stabilized.
• Whilst gold has behaved more like a risk asset lately (liquidated to cover losses elsewhere), the overnight move toward $116 Brent oil is reviving the stagflation narrative. Investors may be starting to view gold again as a hedge against a global growth slowdown caused by the energy blockade.
• Despite the Houthi missile attacks on Israel overnight, gold didn't see a massive spike. Investors appear to be waiting for the April 6 deadline as the next key to moves in treasury yields and rate expectations.  
• Gold remains around the mid-point of the 200-day EMA at $4,237 and the 100-day EMA at $4,620.