LNG: Gas Looking Oversold As Market Worries About Tariff Impact On Demand

TYM5 is 111-17+, +0-11 from closing levels in today's Asia-Pac session.

• According to MNI's technicals team, Jun'25 10Y futures have breached initial technical resistance at 110-26 (Mar 25 high). The medium-term trend condition is bullish, the first key resistance is located at 111-17+, the Mar 20 high.
• A strong risk-off tone has extended into today’s Asia-Pac session ahead of this week's Trump Tariff "Liberation Day" rollout on April 2, not to mention Friday's employment data for March.
• Cash US tsys are 5-6bps richer across benchmarks, with a slight steepening bias, as concern over the health of the US economy fuels demand for haven assets.
• "US Treasuries have outperformed stocks this quarter, heading for a more than 2% gain, while the equity benchmark S&P 500 fell about 5%. It marks the first time since the onset of the pandemic in March 2020 that stocks fell, and bonds rose in a three-month period." (per BBG)

The latest round of ACGB May-28 supply sees the weighted average yield print 1.15bps through prevailing mids (per Yieldbroker), extending the recent trend of firm pricing at ACGB auctions.

• Moreover, the cover ratio jumped to a robust 4.4250x from 3.5400x at the previous outing.
• As highlighted in the preview, the outright yield was 15-20bps higher than the previous but around 55bps lower than the cycle peak in early November last year.
• Additionally, market expectations for RBA easing in 2025 have become more aggressive ahead of tomorrow’s RBA Policy Decision. While a 25bp rate cut in April is given only a 5% probability, a cumulative 70bps of easing is priced by year-end.
• Also on the positive side, it's important to note that the May-28 bond was included in the YM basket and that sentiment towards global bonds has improved recently.
• There has been no notable movement in the cash line in post-supply dealings. 

The Australian Office of Financial Management (AOFM) sells A$600mn of the 2.25% 21 May 2028, issue #TB149:

• Average Yield (%): 3.6498 (prev. 3.5038)
• High Yield (%): 3.6525 (prev. 3.5050)
• Bid/Cover: 4.4250x (prev.  3.5400x)
• The amount allotted at the highest accepted yield as a percentage of the amount bid at that yield (%): 72.4 (prev. 96.4)
• Bidders 37 (prev. 32), successful 11 (prev. 12), allocated in full 7 (prev. 7)