AUSTRALIA: Consensus Expects Some Normalisation In July Labour Data

• CHINA H1 EXPORTS +7.2% Y/Y IN YUAN TERM: CUSTOMS
• CHINA H1 IMPORTS -2.7% Y/Y IN YUAN TERM: CUSTOMS
• CHINA H1 TRADE SURPLUS +CNY4.21 TRLN: MNI CAL

ACGBs (YM -1.0 & XM -3.5) are slightly weaker on a data-light session. Ranges have been narrow.

• Cash US tsys are slightly mixed, 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 -5bps.
• The bills strip is slightly cheaper, with pricing -1 to -2.
• 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%).
• “The Reserve Bank of Australia is set to start a fresh round of monetary easing in August, followed by further cuts in November, February 2026, and May 2026, Westpac said Friday.” (MTN via BBG)

The most notable feature of last week's CFTC FX positioning update (for the week ending July 8th), was the cut back in yen long positioning, see the table below. Leveraged players cut JPY net longs by close to 10.6k, but maintained an outright long of just over 5k. Asset managers were more modest in their trimming (-5.4k). These moves follow USD/JPY's rebound back above 147.00 recently. USD/JPY was also supported on dips last week, which may hint at more trimming of JPY longs. Focus remains on trade negotiations as the Aug 1 deadline approaches (when tariff rates rise to 25%). 

• Elsewhere for EUR and GBP, leveraged and asset manager position shifts were mixed. Leveraged players trimmed EUR longs almost back to flat, but asset managers raised their net long position by more.
• For GBP/USD it was the opposite, but aggregate positioning was little changed.
• For AUD, leveraged players trimmed net shorts, while asset managers sold more A$ modestly.
• CAD was sold by both leveraged names and asset managers, adding to outright shorts for both segments. 

Table 1: CFTC Positioning Update - Weekly Changes, Outright Positions By Major Currencies

Source: Bloomberg Finance L.P./MNI