OIL: Geopolitics Drove Oil Higher Tuesday

• Bank of Korea to Sell KRW700bn 91-Day Bonds
• South Korea to Sell KRW4.4 tn 3-Year Bonds
• China to Sell CNY20bn 28-Day Bills
• Philippines To Sell PHP 8.0Bln 91D Bills (PH0000059537)
• Philippines To Sell PHP 8.0Bln 182D Bills (PH0000059917)
• Philippines To Sell PHP 9.0Bln 364D Bills (PH0000060923)

source: Bloomberg Finance LP / MNI

The NZD/USD had a range Friday night of 0.5947 - 0.5968, Asia is trading around 0.5950. US equities extended back to their highs on Friday. Risk has opened a little higher this morning, E-minis +0.18%, NQU5 +0.13%. NZD/USD bounced nicely off its 0.5850 support last week but depending on your view I would suspect sellers could return on any bounce back toward 0.6000/0.6050. For the moment firmly back in the 0.5850-0.6100 range looking for a catalyst to break and give clearer direction. 

• Bloomberg - “ NZ Prime Minister Christopher Luxon has conceded the government is unlikely to win a reduction in the tariff rate the US has applied to NZ goods. Finance Minister Nicola Willis said the increased US tariff rate is “not a big shock, it's a small one” in terms of the overall economy according to her.”
• “Carry traders are piling into high-yielding EM currencies as wagers on Fed rate cuts weaken the dollar.” - BBG
• Options : Closest significant option expiries for NY cut, based on DTCC data:  0.5920(NZD583m), 0.5930(NZD646m), 0.5960(NZD301m). Upcoming Close Strikes :  0.5825(NZD300m Aug 14). - BBG
• CFTC Data shows Asset Managers have cut their longs completely and started to rebuild a short in the NZD -1811(Last +3903), the Leveraged community added to their shorts slightly -6778(Last -6250).

Fig 1: NZD CFTC Data

Source: MNI - Market News/Bloomberg Finance L.P