JGBS: Cheaper After Poor 5Y Auction

Bitcoin has had a range of $118 312.80 - $121 365.19 in the Asia- Pac session, it is currently trading around $121 280, +1.80%. Bitcoin is making new all time highs through $120 000 this morning as the market and institutional in particular seem to be getting ahead of what they perceive to be an important week for the industry. 

• (Bloomberg) - ‘House Plans ‘Crypto Week’ to pass Stablecoin, Other Bills. House Republicans are turning their attention toward advancing President Trump’s cryptocurrency agenda as they seek to send landmark stablecoin legislation to the president’s desk and advance other digital currency legislation. The week of July 14 is set to be “Crypto Week.”
• Lance Roberts on X:“There has been a lot of talk about the demise of the dollar, even though it still comprises 58% of foreign reserves. However, one thing that could change that is the rise of stablecoins, where 99% of all stablecoins are pegged to the dollar. If the world goes digital, as expected, the dollar may be the dominant reserve."
• Andreas Steno Larsen - “Big week in relation to the legislative landscape for BTC/Crypto in the US next week and BTC is making a weekend breakout as we speak. ”

Fig 1 : Bitcoin Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

ACGBs (YM -2.0 & XM -2.0) sit weaker after dealing in narrow ranges in today’s Sydney session.

• Cash US tsys are slightly cheaper, with a steepening bias, in today's Asia-Pac session after Friday's bear-steepener.
• Cash ACGBs are 2-3bps cheaper with the AU-US 10-year yield differential at -6bps. At -6bps, the differential is positioned near the middle of the +/- 30bps range that has held since November 2022.
• The bills strip is slightly cheaper, with pricing -1 to -3.
• RBA-dated OIS pricing is slightly firmer across meetings today. A 25bp rate cut in August is given an 88% probability, with a cumulative 59bps of easing priced by year-end (based on an effective cash rate of 3.84%).
• Tomorrow, the local calendar will see Westpac Consumer Confidence.
• This week, the AOFM plans to sell A$300mn of the 4.75% 21 June 2054 bond tomorrow, A$800mn of the 4.25% 21 March 2036 bond on Wednesday and A$1100mn of the 1.00% 21 November 2031 bond on Friday.

The BBDXY has had a range of 1198.51 - 1200.95 in the Asia-Pac session, it is currently trading around 1200, +0.05%. The BBDXY has once again found decent supply capping the 1200 area. Price action is interesting though in that the price is not violently moving lower from these bouts of strength as it did in the past. The price does look stretched and the market is short so a correction is not out of the question. Axios via (BBG) - Trump To Announce 'Aggressive' Ukraine Weapons Plan : Headlines have crossed from Axios that US President Trump will announce an 'aggressive' Ukraine weapons plan Monday. "President Trump will announce a new plan to arm Ukraine on Monday that is expected to include offensive weapons, two sources with knowledge of the plans tell Axios."

• EUR/USD -  Asian range 1.1662 - 1.1698, Asia is currently trading 1.1680. The pair tried lower on the open but has again seen solid demand again just towards the 1.1650 area in our session. The price is still starting to look a little stretched in the short term and is vulnerable to any correction in the USD, first support is back towards 1.1600 then more importantly the 1.1450 area.
• GBP/USD - Asian range 1.3472 - 1.3504, Asia is currently dealing around 1.3480. Price has rejected the move higher but the USD would need to gain momentum higher for GBP/USD to extend lower in the short-term. First support right here around 1.3500 a break below here would signal a deeper pullback to the more important 1.3350/1.3400 area.
• USD/CNH - Asian range 7.1686 - 7.1758, the USD/CNY fix printed 7.1491, Asia is currently dealing around 7.1700. Sellers should be around on bounces while price holds below the 7.2500 area and the PBOC manages the fix lower.
• Cross asset : SPX -0.45%, Gold $3354, US 10-Year 4.415%, BBDXY 1200, Crude oil $68.41
• Data/Events : Germany BBG Economic Survey, France BBG Economic Survey, EZ BBG Economic Survey, Spain BBG Economic Survey

Fig 1: GBP/USD Spot Hourly Chart

Source: MNI - Market News/Bloomberg Finance L.P