INDIA: Country Wrap: Regulator Relaxes Rules on FDI in Bonds

The AUD/NZD cross sits back near 1.0840 in latest dealings around session lows. This puts us back under the 20-day EMA, see the chart below. Recent highs were marked at around the 100-day EMA, close to 1.0920.. The earlier RBA cut, along with trimmed inflation and growth forecasts has weighed on the cross in latest dealings. RBA Bullock also stated the RBA considered a 50bps cut, which has weighed further on the AUD. Downside focus for the pair may rest with a test back under 1.0800 (note earlier May lows in the pair were at 1.0760). 

• The AU-NZ 2yr spread is back off recent highs last near +27bps. We were around +45bps close to a week ago. 

Fig 1: AUD/NZD Versus Key EMAs 

Source: MNI - Market News/Bloomberg  

The ESM, Portugal and the EU are all still due to sell bills this week, while Germany, the Netherlands and France came to the market yesterday. We expect issuance to be E19.8bln in first-round operations, up from E18.1bln last week. 

• Today, the ESM will look to sell up to E1.1bln of the new 6-month Nov 20, 2025 bills.
• Tomorrow morning, Portugal will come to the market with a combined E1.25-1.50bln of the 6-month Nov 21, 2025 BT and the new 12-month May 22, 2026 BT.
• Finally tomorrow, the EU will look to issue up to E1.0bln of the 3-month Aug 8, 2025 EU-bill, up to E1.0bln of the 6-month Nov 7, 2025 EU-bill and up to E1.0bln of the 12-month May 8, 2026 EU-bill.

• RES 4: 5565.23 1.618 proj of the Apr 7 - 9 - 10 price swing   
• RES 3: 5516.00 High Mar 3 and the key bull trigger
• RES 2: 5471.00 High Mar 19 / 20
• RES 1: 5467.00 Intraday high 
• PRICE: 5452.00 @ 06:23 BST May 20 
• SUP 1: 5355.00 Low May 15                        
• SUP 2: 5251.88/5190.67 20- and 50-day EMA values 
• SUP 3: 5055.00 Low Apr 30        
• SUP 4: 4959.00/4812.00 Low Apr 23 / 16 and a key support  

A bullish theme in Eurostoxx 50 futures remains intact and price has traded to a fresh short-term cycle high. The contract is extending the recent breach of 5263.01, 76.4% of the Mar 3 - Apr 7 bear leg, and maintains the sequence of higher highs and higher lows. Sights are on 5516.00, the Mar 3 high and the key bull trigger. Initial firm support to watch lies at 5190.67, the 50-day EMA. Clearance of this level would signal a possible reversal.