GOLD: Dollar Up and Gold Down 

Risk sentiment has started this week much the same way as it ended last week, with downside pressures evident. Weekend news flow wasn't positive from a risk appetite standpoint. US equity futures are down, but away from worst levels. Eminis last off 0.50%, but still sub 5600. Yen is outperforming in the FX space, up nearly 0.30% versus the USD, while NZD is down 0.20%. US bond futures are higher as well, while gold has hit a fresh record high near $3098. 

• Trump stated on Saturday little concern around rising foreign car prices: ""I couldn't care less. I hope [foreign automakers] raise their prices, because if they do, people are going to buy American-made cars. We have plenty," he said in the interview with NBC's Kristen Welker that aired Saturday." (see this link). This suggests some comfort around fall out from tariffs from the Trump administration.
• Trump also expressed anger at Russia President Putin and threatened oil penalties: " Trump said he was “very angry” about Putin’s recent comments suggesting ways to install new leadership in Ukraine and sideline President Volodymyr Zelenskiy, NBC reported, citing a phone interview with Trump on Sunday. New leadership in Ukraine means “you’re not going to have a deal for a long time, right,” he said. (see this link).
• The WSJ also reported from late Sunday US time: "Trump spent most of last week playing down expectations for his so-called reciprocal tariff plan on April 2, saying repeatedly that he would be "nicer" than his previous pledges to equalize U.S. tariffs with those charged by other nations, and would consider exempting some nations from tariffs altogether. But in recent days Trump has pushed his team to be more aggressive, people familiar with the conversations said, encouraging them to devise plans that would apply higher rates of tariffs on a broader set of nations." (see this link). 

ACGBs (YM +9.0 & XM +10.5) are significantly richer after US tsys rallied strongly on Friday amid a heavy risk-off tone ahead of this week's Trump Tariff "Liberation Day" rollout on April 2, not to mention next Friday's employment data for March.

• The S&P closed 2% lower while treasury yields dropped sharply across the curve. The US 10-year yield closed 11bps lower at 4.25%, having threatened to break out through the top side of the trading range, the previous day.
• Cash ACGBs are 9-10bps richer with the AU-US 10-year yield differential at +11bps.
• Swap rates are 9-10bps lower.
• The bills strip has bull-flattened, with pricing +3 to +10.
• RBA-dated OIS pricing is flat to 9bps softer across meetings today, with April 2026 leading. A 25bp rate cut in April is given a 6% probability, with a cumulative 71bps of easing priced by year-end.
• The focus this week will be on tomorrow's RBA decision after it cut rates 25bp to 4.1%. Given the cautiousness surrounding February's easing, rates are forecast to be on hold.
• Retail sales for February will print just before the RBA decision and are forecasted to rise 0.3% m/m after 0.3%.
• The AOFM plans to sell A$600mn of the 2.25% 21 May 2028 bond today.

USD/JPY tracks near 149.55/60 in latest dealings, down from end Friday levels in the US. Yen was an outperformer through Friday's session as global equity sentiment faltered during the session, led by US markets. Such trends have continued in early dealings today. 

• For USD/JPY technicals, the primary trend direction is unchanged, it remains down and the latest recovery is considered corrective. For bears, the first key support to watch is 148.18, the Mar 20 low. A break would be bearish. On the topside, the pair has pierced resistance at 150.94, the 50-day EMA. A clear break of this EMA would undermine the bearish theme and signal scope for a stronger rally towards 152.70, a Fibonacci retracement.
• The early tone to US equity futures is weaker in the first part of Monday trade. US Eminis are off close to 0.60% after Friday's near 2% cash trading loss. The WSJ noted earlier that the Trump administration is weighing broader/higher tariffs. This comes ahead of Wednesday reciprocal tariff/liberation day announcement.
• US yields finished sharply lower on Friday, the 10 year back to 4.25%, down 11bps on Friday. US-JP yield differentials are rolling back over and sit near March cycle lows.
• Yen is up against the rest of the G10 so far today, particularly NZD and AUD.
• On the local calendar we have Feb preliminary industrial production, along with Feb retail sales. Later on Feb housing starts are out.
• Also note the following option expiry for NY cut later today: Y150.00($868mln).