ASIA: Government Bond Issuance Today

CNH lost 0.14% for Tuesday's session, as broader USD indices recovered ground (BBDXY index up 0.54%). USD/CNH tracks near 7.1910 in early Wednesday dealings, so still within recent ranges. We are close to the 20-day EMA resistance point, which the pair has spent little time above since the start of May. Greater focus is likely to rest near 7.2350/7.2400, which is where the 100 and 200-day EMAs rest. 

• Spot USD/CNY finished up at 7.1868, while the CNY CFETS basket tracker edged down 0.13% to 95.53 (per BBG).
• Broader USD sentiment was aided by headlines surrounding the Israel-Iran conflict, paired with President’s Trump escalatory rhetoric, which dented risk sentiment in currency markets across the US session. All the majors fell versus the USD, albeit with safe havens CHF and JPY seeing more modest drops.
• CNH once again displayed a low beta with respect to broader USD shifts. EUR/CNH sits back near 8.2570, against recent highs of 8.3454, while has firmed towards 20.20, just short of recent highs.
• Late yesterday, May FX settlement data showed a shift back into surplus, highlighting some improvement in the underlying flow backdrop, consistent with USD/CNY moving off recent highs.
• The local data calendar has Swift global payments in CNY out tomorrow, then the 1yr and 5yr LPRs on Friday (no change is expected). 

The AUD had a range overnight of 0.6466 - 0.6544, Asia is opening around 0.6475. The AUD has failed once more on its attempts to get momentum above the 0.6550 area. The window for a peaceful resolution in the middle east seems to be closing and with the US potentially now getting involved, the USD is finally looking to bounce.

• (Bloomberg) – “Australia’s economy and budget need further support to withstand global volatility, according to Treasurer Jim Chalmers. He highlights three “blunt truths”: The budget is not yet sustainable, the economy is not productive enough, and it is not sufficiently resilient in the face of global volatility.” 
• “ Abu Dhabi National Oil Co. has made an $18.7 billion offer for Australian fossil fuel producer Santos Ltd. to expand production of liquefied natural gas.”(BBG)
• The AUD failed miserably again to break above the 0.6550 area, with momentum stalling and the USD starting to bounce the probability of it moving to the bottom end of its range increases.
• Price remains in the 0.6350 - 0.6550 range for now, a sustained break above 0.6550/0.6600 is needed for the move higher to accelerate. 
• Buyers should continue to be around on dips while the support in the AUD/USD holds, a close back below 0.6350 is needed to challenge the newly formed uptrend. 
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6400(AUD321m). Upcoming Close Strikes : 0.6600(AUD 1.1b June 19)
• CFTC Data shows Asset managers maintaining their shorts, the Leveraged community though continued to build up their shorts again.

• Data/Event: Westpac Leading Index, Tomorrow is Unemployment

  Fig 1: AUD/USD spot Daily Chart

  

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

MNI interviews Stephen Miran, chair of the White House Council of Economic Advisers, on the economic outlook. -- On MNI Policy MainWire now, for more details please contact sales@marketnews.com

** note this is the correct interview, the earlier bullet on interviewing Bill English was an old interview, published incorrectly