CHINA: Bond Wrap.

• RES 4: 136.37 1.236 retracement proj of the Aug 5 - Sep 2 bear leg         
• RES 3: 136.00 Round number resistance
• RES 2: 135.66 High Aug 5 and the bull trigger 
• RES 1: 134.86/135.49 High Sep 18 / 11                     
• PRICE: 134.10 @ 05:30 BST Sep 23
• SUP 1: 133.99/60 Low Sep 19 / 50-day EMA             
• SUP 2: 132.65 Low Sep 2 and the bear trigger 
• SUP 3: 132.25 Low Jul 29 
• SUP 4: 131.66 Low Jul 26

Bund futures have pulled back from their recent highs and continue to trade closer to their recent lows. The move down has resulted in a break of the 20-day EMA. This signals scope for a deeper retracement near-term, potentially towards the 50-day EMA, at 133.60. Clearance of this average would undermine a bullish theme. For bulls, a reversal higher would refocus attention on key resistance and the bull trigger at 135.66, the Aug 5 high.

NZGBs closed 1-4bps cheaper after a relatively subdued session. There has been no cash trading for US tsys in today's Asia-Pac session due to a holiday in Japan. TYZ4 currently deals at 114-20+, -0-06+ from Friday’s closing levels.  

• Outside of the previously outlined Job Ads data, there hasn't been much by way of domestic drivers to flag. It is a reasonably quiet week for NZ, with Friday’s ANZ Consumer Confidence data as the highlight.
• Across the ditch, the RBA Policy Decision is due tomorrow, with Bloomberg consensus unanimous in expecting a no-change outcome.
• Swap rates closed flat to 4bps higher, with the 2s10s curve steeper.
• RBNZ dated OIS pricing closed little changed. A cumulative 83bps of easing is priced by year-end.
• On Thursday, the NZ Treasury plans to sell NZ$250mn of the 3.00% Apr-29 bond, NZ$225mn of the 4.50% May-35 bond and NZ$25mn of the 2.75% Apr-37 bond.

Safe havens have lost ground in the first part of Monday trade, while the AUD has outperformed. The BBDXY and DXY USD indices sit little changed. Yen is off around 0.25%, while CHF is down by a little over 0.10%. 

• The backdrop from a regional equity market standpoint has been positive, with most major markets higher at this stage. China related sentiment has been supported by a 10bps cut to 14 day repo rate. This is not a widely used benchmark but may signal further policy easing is coming. A press conference will be held tomorrow, where the PBoC Governor will be in attendance.
• US equity futures are also firmer higher, up 0.30% for Eminis and nearly 0.60% for Nasdaq futures.
• This has likely helped AUD/USD, which is the outperformer in the G10 space, up 0.35% to 0.6835. Recent highs at 0.6839 are very close by. Late December 2023 levels rested just above 0.6870.
• We had earlier preliminary PMI data in Australia, for September, but sentiment wasn't shifted. NZ's trade deficit widened in August, but didn't impact NZD much. NZD/USD was last a touch higher at 0.6240/45. The AUD/NZD cross is close to recent highs, last near 1.0940/45.
• USD/JPY got close to Friday highs (144.49) but ran out of steam at 144.46, the pair last near 144.25, still 0.25% weaker in yen terms. Japan markets have been out today, so no cash Tsy trading has taken place. US 10yr futures have edged down but remain within Friday's ranges.
• Commodities have been mixed, with oil up on the China news and continued geopolitical tensions. Iron ore is softer but hasn't impacted AUD.   
• Looking ahead on the data front, we have EU and US September preliminary PMIs are released. The Fed’s Bostic, Goolsbee and Kashkari also speak.