EM CREDIT SUPPLY: Guangxi Communications (GXCMIN, Baa3/NR/BBB) - FV Estimate

A very quiet session in Asia today, risk trading slightly better as stocks hold onto their late bounce in the US. (Bloomberg) -- “Global foreign exchange markets recorded a “sharp rise” in volatility earlier this month as traders worked through the potential impact of US tariff announcements, before becoming “more settled” in recent days, according to Reserve Bank of Australia Assistant Governor Christopher Kent. Kent didn’t comment on what the tariffs meant for Australia’s economy or the nation’s monetary policy outlook.”

• AUD/USD - Asian range 0.6415 - 0.6450, After a very quick spike up to 0.6450 the Aud has just as quickly fallen back towards the 0.6415 area. Dips back to the 0.6250/0.6300 area should continue to find demand while the market continues to focus on a lower USD.
• AUD/JPY - Asian range 91.24 - 91.68. Price goes into the London trading around 91.35, still within the last 11 days range of 0.8950/0.9200.
• NZDUSD - Asian range 0.5951 - 0.5987, going into London trading around 0.5951. Demand should return first around 0.5900, then around the 0.5850 area.
• AUD/NZD - Asian range 1.0748 - 1.0785, the cross has continued to drift higher in the Asian session. Watch for supply to return on any bounce back towards the 1.0800/50 area.

Fig 1 : AUD/JPY Spot Hourly Chart

Source: MNI - Market News/Bloomberg

TYM5 has traded a little lower with a range of 111-26 to 111.30+ during the Asia-Pacific session. It last changed hands at 111-27+, down 0-01 from the previous close. No Cash trading today with Japan out.

• Bloomberg- “Treasury Secretary Scott Bessent's debt-management team is expected to keep plans for sales of longer-dated securities steady, despite recent market swings.”
• “The quarterly supply announcement will set the size of upcoming auctions, including 3-, 10-, and 30-year maturities, and may provide guidance on debt-limit considerations.”
• “Despite having criticized his predecessor Janet Yellen for tilting US debt toward short-dated Treasuries, Bessent since taking office in January has said the department is “a long way” from replacing them with longer-term debt.”
• Microsoft and Meta will headline earnings on Wednesday, followed by Apple, Amazon, and Eli Lilly on Thursday, these reports should hopefully provide the market with some clarity and will dictate whether this bounce in risk is able to continue or falter.
• The 10-year Yield, has put in a lower high around 4.40% and has broken through the recent support around 4.25%. The next support is towards the 4.10 area which should find supply once more as the market will continue to look for higher term premium while uncertainty remains elevated.
• Data/Events : US GDP, ISM Manufacturing, NFM payrolls the main events this week. 

CTV has said that PM Carney will hold government following elections but again it will be a minority government. Elections Canada has allocated 341 of the 343 districts with Carney’s Liberals leading in 157 with 43.3% of the vote and so even they win the remaining 2 seats will be short of the 172 needed for a majority. It does look like they will hold more than the 151 they had in the last parliament though. 

• The Conservatives are leading in 148 (41.3%) gaining 28 but not enough to take government. The major parties benefited from a swing away from smaller ones with Bloc Quebecois, New Democrats and the Greens likely to hold fewer districts.
• The Canadian dollar strengthened against the greenback when Canadian networks called the election for Carney signalling stability in the fight against US tariffs, however it has now given up those gains as the US dollar has broadly strengthened again (BBDXY +0.2%). USDCAD fell to 1.3809 but is now up 0.2% on the day to 1.3855.