AUSSIE BONDS: Cheaper But Narrow Ranges Ahead Of US Payrolls

• As the PBOC announced stimulus measures today, equities got a boost and gold fell.
• Gold is down -1.3% in the Asia trading day at US$3,384.54, having opened at $3,431.60.
• The PBOC announced a range of measures with the key being a 0.10% in the interbank funding rate and a 0.50% reduction in the RRR.
• This comes after US President Trump suggested that China is eager to negotiate due to its 'struggling' economy but emphasized the talks would take place at the right time.
• Another Central Bank reported overnight that their gold reserves are on the increase with the Central Bank of Ghana's gold reserves up by 31 tonnes in March.
• As gold does not pay interest it can be highly sensitive to interest rates as that dictates the borrowing cost to buy gold. Gold markets will watch carefully tonight as the push pull on rates continues with the White House demanding a rate cut and the FED talking more neutral

• RES 4: 133.90 1.236 proj of the Mar 25 - Apr 7- 9 price swing                 
• RES 3: 133.00 round number resistance      
• RES 2: 132.56 High Feb 28 and a key resistance
• RES 1: 132.03 High Apr 7 and the bull trigger                    
• PRICE: 130.98 @ 05:33 BST May 7
• SUP 1: 130.54/129.92 50-day EMA / Low Apr 11          
• SUP 2: 129.02 Low Apr 10            
• SUP 3: 128.60 Low Apr 9 and a key support   
• SUP 4: 128.47 Low Mar 28  

Bund futures remain below their most recent highs. Despite the latest move down, a bull cycle is intact and the sell-off between Apr 7 - 9 is considered corrective. Sights are on resistance at 132.03, the Apr 7 high and a bull trigger. A clear break of this level would confirm a resumption of the uptrend and open 132.56, the Feb 28 high. Firm support lies at 128.60, Apr 9 low. A breach of it would alter the picture. First support is 130.54, the 50-day EMA.

NZGBs closed showing a bull-steepener, with benchmark yields 5-7bps lower, following today’s labour market data. 

• However, with the NZ-US and NZ-AU 10-year yield differentials little changed on the day, the data's impact appears to have been limited.
• The Q1 labour market data shows some stabilisation, but at weak levels.
• While the unemployment rate was stable at 5.1%, better than the consensus, it appears that the rise in labour supply that was expected didn’t materialise. Thus, the data is close enough to what the RBNZ expected in February, and another 25bp rate cut on May 28 remains likely.
• The RBNZ warned that financial stability risks have risen over the past six months amid global uncertainties and said banks have enough buffers to cushion the economy should things get worse, according to its FSR report.
• Swap rates closed 4-5bps lower.
• RBNZ dated OIS pricing closed slightly softer across meetings. 26bps of easing is priced for May, with a cumulative 77bps by November 2025.
• Tomorrow, the local calendar will see the NZ Government's 9-Month Financial Statements.
• Tomorrow, the NZ Treasury plans to sell NZ$225mn of the 3.00% Apr-29 bond, NZ$175mn of the 4.25% May-36 bond and NZ$50mn of the 2.75% May-51 bond.