CHINA: Country Wrap: Official PMIs Continue to Moderate

ACGBs (YM +3.0 & XM +5.0) are trading moderately stronger on another relatively subdued data-light Sydney session.  

• Cash US tsys are 1-2bps richer, with a flattening bias, in today's Asia-Pac session, extending yesterday's bull-flattener. Today’s US calendar: S&P Global US Man PMI, Wards Total Vehicle Sales, ISM Manufacturing, Construction Spending, JOLTS, Dallas Fed Services Activity.
• Top U.S. trade officials are now seeking narrower agreements with other countries to secure deals before President Donald Trump's July 9 tariff deadline, the Financial Times reported on Tuesday, citing people familiar with the talks.
• The cash 10-year is 5bps richer, with the AU-US 10-year yield differential at -9bps.
• The bills strip is slightly mixed, with flat to +3.
• RBA-dated OIS pricing is flat to modestly softer across meetings today. A 25bp rate cut in July is given a 95% probability, with a cumulative 83bps of easing priced by year-end (based on an effective cash rate of 3.84%).
• Tomorrow, the local calendar will see Building Approvals and Retail Sales data.
• This week, the AOFM plans to sell A$1200mn of the 2.75% 21 June 2035 bond tomorrow and A$1000mn of the 2.25% 21 May 2028 bond on Friday.

The KOSPI lead the way for the region's major bourses as hopes remain high that the new government will deliver on the long held plans to revise the commercial act. The Shenzhen Exchange has issued new rules to simplify the process for tech funds listed on the the ChiNext to raise funds.  The Philippines has cut the transaction costs for stock trading in a move seen to improve liquidity on the PSEi.  

• China's major bourses were mixed today with the Hang Seng lower by -0.85% whilst the CSI 300 was up +0.05%, Shanghai Comp +0.20% and Shenzhen fell by -0.95%
• The KOSPI was one of the best regional performers rising +1.08%.
• The FTSE Malay KLCI did very little, up just +0.04%
• The Jakarta Composite fell -0.27%
• The NIFTY 50 is up just +0.10% in a bid to recover from yesterday's fall of -0.47%

• RES 4: 132.42 2.000 proj of the May 14 - 20 - 22 price swing
• RES 3: 132.00 Round number resistance    
• RES 2: 131.95 High Jun 13 and the bull trigger 
• RES 1: 130.63/131.33 20-day EMA / High Jun 20
• PRICE: 130.30 @ 05:41 BST Jul 1
• SUP 1: 130.00 Low Jun 30              
• SUP 2: 129.67 76.4% retracement of the May 14 - Jun 13 bull leg  
• SUP 3: 129.30 Low May 22   
• SUP 4: 128.97 Low May 14 and a reversal trigger  

Recent weakness in Bund futures resulted in a print below key short-term support at 130.12, the Jun 5 low. A clear break of this price point would highlight a bearish threat, undermine the recent bullish theme, and signal scope for an extension towards 129.30, the May 22 low. Key resistance has been defined at 131.95, the Jun 13 high. Clearance of this level would reinstate a bullish theme.