AUSSIE BONDS: Flat Despite Weak Q1 GDP, Q2 GDP Bounce Back Likely

• RES 4: 133.90 1.236 proj of the Mar 25 - Apr 7- 9 price swing                 
• RES 3: 133.00 round number resistance      
• RES 2: 132.56 High Feb 28 and a key resistance
• RES 1: 132.03 High Apr 7 and the bull trigger                    
• PRICE: 130.87 @ 05:35 BST May 5
• SUP 1: 130.50/129.92 50-day EMA / Low Apr 11          
• SUP 2: 129.02 Low Apr 10            
• SUP 3: 128.60 Low Apr 9 and a key support   
• SUP 4: 128.47 Low Mar 28  

Bund futures traded lower Friday and remain below their recent highs. Despite the latest move down, a bull cycle is in play and the sell-off between Apr 7 - 9 is considered corrective. Attention is on resistance at 132.03, the Apr 7 high and a bull trigger. Clearance of this level would confirm a resumption of the uptrend and open 132.56, the Feb 28 high. Firm support lies at 128.60, the Apr 9 low. A break of this level would alter the picture. 

Oil prices are sharply lower today following OPEC’s decision on the weekend to increase output by more than 400kbd, close to the higher-than-expected amount in April. The market was already concerned about a surplus and then US tariffs were announced and now OPEC is adding more to supply. It appears to be now focused on increasing its market share rather than supporting prices and by allowing all members to increase output it is punishing overproducers.

• WTI is down 4.0% to $55.93/bbl in APAC trading off the intraday low of $55.30, below initial support at $56.39 but still above the bull trigger at $54.67. Brent is 3.7% lower at $59.03/bbl after falling to $58.50, holding above the bull trigger at $58.00 but below support at $59.30.
• Goldman Sachs has cut its oil forecast by $2-3/bbl in reaction to the further rise in OPEC production and Morgan Stanley has reduced its H2 2025 Brent projection by $5 to $62.50, according to Bloomberg.
• US President Trump said Sunday (ET) that there could be a number of trade deals completed this week. The main worry has been over the possibility of an agreement with China, the world’s largest oil importer, but Trump said that Chinese and US officials were talking about “different things”. He plans to travel to the Middle East this month.
• Later US services ISM/PMI data are released. The UK is closed.

The BBDXY has had an Asian range of 1219.84 - 1224.72, Asia is currently trading around 1221. Bloomberg - French PM Francois Bayrou plans to unveil a debt reduction and economic boost strategy, potentially seeking public approval through a referendum." The USD has traded very weakly across the board today in Asia driven by the USD/TWD. Asian holidays and thin liquidity have not helped but almost 8% in 2 days is an extreme event and you would expect buyers to reemerge sub 30.00.

• EUR/USD -  Asian range 1.1297 - 1.1347, Asia is currently trading 1.1335. Intra-day support is around the 1.1250 area, should this area not hold demand should remerge on dips back to 1.1100. 
• GBP/USD - Asian range 1.3260 - 1.3301, Asia is currently dealing around 1.3290. Intra-day support  is around the 1.3250 area, then the pivotal 1.30/31 support is next.
• USD/JPY -  Asian range 144.07 - 145.00, has drifted lower for most of the Asia session. Look for some support initially back towards 143.00, but we would probably need another catalyst to test below that again. Which probably makes a range of 143-147 for the week most likely.
• USD/CNH - Asian range 7.1893 - 7.2187, Chinese markets are shut for a holiday. The Longs in Usd/Asia are now capitulating, this was perceived to be the cleanest expression of the tariff trade but this move lower in USD/TWD is causing forced selling as stops are hit.
• Cross asset : SPX -0.75%, Gold $3257, US TYM5 111-08, BBDXY 1221, Crude oil $55.98. 
• Data/Events : US ISM Services PMI

Fig 1: USD/TWD Spot Weekly Chart

Source: MNI - Market News/Bloomberg