OIL: Consolidates In Asia After Overnight Move Lower

The NZD/USD had a range of 0.6025 - 0.6062 in the Asia-Pac session, going into the London open trading around 0.6035. The NZD has drifted lower for most of our session as US stocks fail to push on after positive headlines on the conclusion of the US-China talks. The NZD has looked to be building for an extension higher, CPI tonight will determine if this can come to pass.

• Bloomberg - “New Zealand's annual net immigration fell to 21,317 in April, a two-and-a-half year low, which could slow the country's economic recovery and lead to more interest-rate cuts.”
• “The decline in net immigration is partly driven by New Zealand citizens leaving the country to seek better incomes, which could dampen demand and prompt the Reserve Bank to provide policy stimulus.”
• The NZD continues to find demand back towards the 0.6000 area as dips remain well supported, bulls will be hoping this holds to have another crack at extending higher.
• The support back towards 0.5850 has held very well, and while this continues to hold expect buyers to be around on dips. A clear break above 0.6050/0.6100 could provide the spark for the next leg higher. The market remains short and above here they could be forced to pare back.
• CFTC Data showed Asset managers maintaining their shorts, while the leverage actually added to their shorts last week.
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6100(NZD353m), 0.6145(NZD348m). Upcoming Close Strikes : none

• AUD/NZD range for the session has been 1.0769 - 1.0793, currently trading 1.0790.  A top looks in place now just above 1.0900, the cross topped out on Monday towards the 1.0800/25 sell area, the first target looks to be around 1.0650.

  Fig 1: NZD/USD Spot Daily Chart

  

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

• China's bond futures all rose today as the Central Bank withdrew liquidity during the OMO
• The 10YR future is up +0.04 to 109.025 and remains above all major moving averages. The nearest the 20-day EMA is at 108.83
• The 2YR future is up +0.01 at 102.44 and sits just above the 20-day EMA of 102.43
• The CGB10YR is marginally better today at 1.68%

The AUD/USD has had a range of 0.6497 - 0.6532 in the Asia- Pac session, it is currently trading around 0.6515. The AUD has drifted lower for most of our session as US stocks fail to push on after positive headlines on the conclusion of the US-China talks. Another failure to get back above 0.6550, CPI tonight will determine if it gets tested again.

• AUS Bond Auction: ACGB Nov-32 Auction Goes Smoothly But With Less Demand: Today's auction reflected solid pricing for ACGBs, with the weighted average yield coming in 0.65bps below prevailing mid-yields, according to Yieldbroker.
• The AUD continues to see demand back towards the 0.6500 area, but the inability to break above 0.6550 on multiple occasions will have any bulls a little concerned.
• Price remains in the 0.6350 - 0.6550 range, a sustained break above 0.6550 is needed for the move higher to accelerate. Price looks like it wants to test the top end of the range, tonight's US CPI print will have a say in that.
• Expect buyers to continue to be around on dips while the support in the AUD holds, a close back below 0.6350 is needed to challenge the newly formed uptrend. 
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6495(AUD400m), 0.6365(AUD550m). Upcoming Close Strikes : 0.6350(AUD 711m June 12), 0.6600(AUD643m June 12)
• CFTC Data shows Asset managers maintaining their shorts, the Leveraged community though continued to add to their shorts again.

• AUD/JPY - Today's range 94.20 - 94.75, it is trading currently around 94.35. Price broke the multiple tops around the 94.00 area over NFP’s. It has since managed to hold these gains, while this continues focus will turn to the high towards 96.00. Support should now be back towards the 93.00/50 area.

  Fig 1: AUD/USD spot Hourly Chart

  

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