US TSYS: Cash Open
Jul-18 00:05
TYU5 is trading 110-22, up 0-05 from its close.
- The US 2-year yield opens around 3.88%, down 0.03 from its close.
- The US 10-year yield opens around 4.44%, down 0.1 from its close.
- Bloomberg - Federal Reserve Governor Adriana Kugler said the US central bank should keep holding interest rates steady “for some time,” citing accelerating inflation as tariffs start to boost prices.
- Nick Timiraos on X: “Waller removes any doubt: He'll vote for a July cut. The opening line of the speech gets to the point: My purpose this evening is to explain why I believe that the FOMC should reduce our policy rate by 25 basis points at our next meeting. Waller arrives at this out-of-consensus position (relative to his colleagues) because he thinks the Fed should look through tariffs and move rates closer to neutral. “We should not wait until the labor market deteriorates before we cut the policy rate.”
- The 10-year yield broke above 4.45% in response to the CPI Data, this implies price is likely to now turn its focus back to 4.65% and could see further paring back of longs. Support is now back towards the 4.35/40% area which has been the pivot in the larger 4.10% - 4.65% range.
- Data/Events: Housing Starts, U. of Mich. Sentiment survey
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US TSYS: Cash Open
Jun-18 00:04
TYU5 is trading 110-25+, down 0-01+ from its close.
- The US 2-year yield opens around 3.947%, unchanged from its close.
- The US 10-year yield opens around 4.395%, up 0.01 from its close.
- (Bloomberg) -- JPMorgan’s Treasury Client Survey for the week ended June 16 showed shorts drop 3ppts into neutral with longs unchanged. The all-client survey shows the most net longs and the fewest outright shorts since May 5.
- “Interest-rate swap spreads widened after the Federal Reserve announced it will hold a meeting June 25 to discuss changes to the supplementary leverage ratio that are expected to boost Treasuries’ relative appeal.”(BBG)
- The 10-year yield bounced strongly off its 4.30/35% support, this area needs to hold if yields are to move higher. The range looks to be 4.30% - 4.60% for now a break either side would provide a clearer direction. Lots for the market to digest as things heat up in the middle east and we approach the FOMC.
- Data/Events: MBA Mortgage Applications, Housing starts, Initial Jobless Claims, FOMC
NEW ZEALAND: Q1 Current Account Narrows On Strong Goods Exports
Jun-17 23:54
The Q1 non-seasonally adjusted current account deficit narrowed substantially to $2.32bn from a downwardly-revised $6.80bn but seasonally adjusted it was similar to Q4 at $5.55bn. This brought it to 5.7% of GDP down from 6.1%, the lowest since Q3 2021 and 3.5pp less than the Q4 2022 peak. The trade deficit narrowed to $1.22bn from $1.63bn, the lowest since Covid-impacted Q2 2021, due to a strong pickup in goods exports. Robust shipments in Q1 are likely to support GDP growth when it is released on Thursday.
NZ current account % GDP
Source: MNI - Market News/LSEG
- Goods exports rose 11.9% q/q in Q1 to be up 18% y/y driven by agricultural products and higher prices for dairy and meat. Imports rose 5.5% q/q to be up 6% y/y driven by intermediate items including processed fuels. Durable consumer goods also saw a robust rise.
- The services balance returned to a deficit in Q1 after a small surplus in Q4, as exports fell 5.9% q/q due to lower visitor expenditure while imports rose 2.4% q/q driven by transport services.
- The net international investment liability position narrowed to $212.2bn in Q1 from $213.6bn, as the value of assets fell by less than liabilities due to global market uncertainty.
NZ goods & services exports vs imports y/y%
Source: MNI - Market News/LSEG
MNI: MNI JAPAN APRIL CORE MACHINE ORDERS -9.1% M/M; MAR +13.0%
Jun-17 23:53
- MNI JAPAN APRIL CORE MACHINE ORDERS -9.1% M/M; MAR +13.0%
- JAPAN APRIL MACHINE ORDERS POSTS 1ST M/M DROP IN 3 MONTHS
