AUSSIE BONDS: Cheaper After Some Positive Trade Deal HLs, US NFP Due

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• The RBA left rates unchanged at 4.10% on April 1, as was widely expected given the cautious tone following February’s 25bp cut. In the press conference, Governor Bullock said that it was a consensus decision and that easing wasn’t part of the discussion.
• It appears that the RBA is keeping its options open given that risks are to both sides and there is significant uncertainty around the outlook, especially from overseas. Upcoming Q1 CPI and March/April jobs data will be important in determining if the Board has become "more confident" that underlying inflation is returning "sustainably" to the mid-point of the target band, which enable it to consider the timing of the next rate cut.
• The central bank believes that Australia is unlikely to experience major direct effects from US tariffs given its small exposure to the US, but key concerns centre around how its main trading partners (China) & supply chains are affected and what retaliatory measures are taken. It noted that policy is "well placed to respond".
• A 25bp rate cut in May is given a 77% probability, with a cumulative 71bps of easing priced by year-end.

• RES 4: 1.1083 High Oct 2 2024  
• RES 3: 1.1040 High Oct 4 2024
• RES 2: 1.0961 76.4% retracement of the Sep 25 ‘24 - Feb 3 bear leg
• RES 1: 1.0861/0955 High Mar 21 / 18 and the bull trigger   
• PRICE: 1.0808 @ 15:50 BST Apr 1
• SUP 1: 1.0733 Low Mar 27 and a key short-term support    
• SUP 2: 1.0661 50-day EMA and a short-term pivot level      
• SUP 3: 1.0602 Low Mar 5     
• SUP 4: 1.0548 50.0% retracement of the Feb 3 - Mar 18 bull run

EURUSD is unchanged. A bullish theme remains intact and recent weakness appears corrective. Moving average studies are in a bull-mode position highlighting a dominant uptrend. Key near-term support lies at 1.0733, the Mar 27 low. A move through it would confirm a clear breach of the 20-day EMA and signal scope for a deeper correction towards the 50-day EMA at 1.0661. Key resistance and the bull trigger is 1.0955, the Mar 18 high.

• RES 4: 130.40 Low Feb 19               
• RES 3: 130.26 61.8% retracement of the Feb 28 - Mar 11 bear leg        
• RES 2: 130.00 Round number resistance  
• RES 1: 129.60 High Apr 1                     
• PRICE: 129.15 @ 05:45 BST Apr 2
• SUP 1: 128.47 Low Mar 28       
• SUP 2: 127.74 Low Mar 25 and a key short-term support             
• SUP 3: 127.20 Low Mar 17  
• SUP 4: 126.53 Low Mar 11 and the bear trigger   

Bund futures are trading closer to their recent highs. The latest recovery is considered corrective, however, the breach of the 20-day EMA and a print above resistance at 129.41, the Jan 14 low, strengthens a bullish theme and opens the 130.00 handle and 130.26, a Fibonacci retracement. Key short-term support to watch lies at 127.74, the Mar 25 low. Clearance of this level would highlight a reversal.