INDONESIA: Country Wrap: Budget Details Released

• RES 4: 1.3550 High Feb 24 ‘22
• RES 3: 1.3510 1.236 proj of the Feb 28 - Apr 3 - 7 price swing
• RES 2: 1.3402/3444 High May 6 / High Apr 28 / 29 and the bull trigger
• RES 1: 1.3360 High May 14   
• PRICE: 1.3305 @ 06:11 BST May 19
• SUP 1: 1.3140 Low May 12   
• SUP 2: 1.3110 50-day EMA
• SUP 3: 1.3041 Low Apr 14  
• SUP 4: 1.2968 Low Apr 11 

Recent weakness in GBPUSD appears corrective. The May 13 bounce highlights a possible reversal pattern - a bullish engulfing candle. The pattern remains valid and if correct, signals the end of the recent corrective cycle and a resumption of the uptrend. Key support to watch is 1.3117, the 50-day EMA. A continuation higher would refocus attention on the key resistance and a bull trigger, at 1.3444, the Apr 28 / 29 high.

• RES 4: 119.960 High Apr 7 and the bull trigger          
• RES 3: 119.780 High Apr 22          
• RES 2: 119.600 High May 7
• RES 1: 118.858/118.950 20-day EMA / High May 12                                     
• PRICE: 118.620 @ 05:52 BST May 19 
• SUP 1: 118.060 Low May 14 and 15 and the bear trigger       
• SUP 2: 117.680 Low Apr 9 and a key support 
• SUP 3: 117.600 Low Mar 28 
• SUP 4: 117.410 Low Mar 27      

A bearish corrective phase in Bobl futures remains intact, however, the recovery from last week’s low does signal a possible reversal and the end of the corrective cycle. A continuation higher would open 118.950, the May 12 high. Clearance of this level would strengthen a bullish theme. On the downside, a resumption of weakness would expose 117.680, the Apr 9 low and a key support. The bear trigger is 118.060, the May 14 / 15 low.

ACGBs (YM -4.0 & XM -6.0) are cheaper on a data-light Sydney session.

• Cash US tsys have twist-steepened in today's Asia-Pac session, with yields 1bp lower to 4bps higher, as the market continued to digest late Friday news that Moody's Ratings downgraded the US credit score.
• (Bloomberg) -- “Goldman Sachs interest-rate strategists raise their year-end Treasury yield forecasts following a larger-than-expected reduction in US-China tariffs.”
• “US House panel approves Trump tax cut bill, setting up a possible vote on passage this week” - [RTRS]
• Cash ACGBs are 4-6bps cheaper with the AU-US 10-year yield differential at flat.
• The bills strip has bear-steepened, with pricing -2 to -6.
• Tomorrow, the local calendar will see the RBA Policy Decision, with the market expecting a 25bp cut to 3.85%.
• RBA-dated OIS pricing is flat to 4bps firmer across meetings today. A 25bp rate cut in May is given a 95% probability, with a cumulative 75bps of easing priced by year-end. Notably, today’s moves leave meetings pricing 4-44bps firmer than levels before the release of Q1 CPI data on April 30.
• The AOFM plans to sell A$1200mn of the 4.25% 21 December 2035 bond on Wednesday and A$800mn of the 2.75% 21 November 2028 bond on Friday.