STIR: $-Bloc Markets Firm Over Past Week, Except For NZ

TYM5 is 110-12+, +1-02+ from closing levels in today's Asia-Pac session.

• Cash US tsys have extended yesterday’s decline during the Asia-Pac session. The sell-off reflects growing concerns that China may retaliate against tariffs by offloading US assets, including US tsys.
• At present, cash US tsys are trading 3-16bps cheaper across benchmarks, with the curve steeper.
• Yesterday, Trump officials confirmed 104% added tariff on China went into effect at noon.
• Concurrently, China vowed to "fight to the end".
• On the local front, the focus turns to the March FOMC minute release at 1400ET today, CPI on Thursday and PPI on Friday morning.
• Reminder, banks kick off the latest earnings cycle this Friday with Bank of New York Mellon, Wells Fargo & Co, JPMorgan Chase and Morgan Stanley reporting.

In Afternoon dealings, JGB futures have gapped lower, -34 compared to the settlement levels.

• (MNI The BoJ is closely analysing how US tariffs will affect Japan’s economy and prices, amid growing uncertainty, Governor Kazuo Ueda told lawmakers on Wednesday.
• The BoJ will manage monetary policy in an appropriate manner, while carefully monitoring the economy, prices and financial markets, he added, without elaborating on how and when the bank might act.
• The bank is also examining how the tariffs evolve and impact the BoJ's economic and price views, he continued.
• Today’s weakness in JGBs appears to be driven by moves in cash US tsys, which have extended their decline during the Asia-Pac session. The sell-off reflects growing concerns that China may retaliate against tariffs by offloading US assets, including tsys. At present, cash US tsys are trading 3–16 basis points cheaper across the curve.
• Cash JGBs have also bear-steepened, with yields 1-30bps higher. The benchmark 30-year yield is 28.3bps higher at 2.812%, a new cycle high and the highest since 2004.
• The swaps curve has twist-steepened, with rates 3bps lower to 20bps higher, pivoting at the 10-year. Swap spreads are tighter.

After opening very heavy and making new lows to 0.5915 the AUD has bounced back to 0.6000 as the USD gives back some of its overnight gains. This is striking as US treasuries yields continue to tear higher touching 4.37% in Asia.

• The Asian range has been 0.5915 - 0.6002. 
• Very interesting price action today with risk under pressure and US yields higher. Amazingly the AUD has had a decent bounce and is struggling to maintain a foothold sub 0.6000. 
• 650m 0.5975 expiring today
• The AUD has been trading poorly across the board in recent days reflecting the markets negative sentiment, the price action today though seems to imply someone is taking advantage of cheap levels and taking some off the table.
• While global markets remain under pressure the AUD will find supply on bounces, expect levels around 0.6100/0.6200 to find resistance.
• Data : FOMC minutes 

AUDUSD

Source: MNI - Market News/Bloomberg