AUSSIE 3-YEAR TECHS: (H6) S/T Net Higher After Recent CPI Vol

• Gold closed at a new high overnight of US$4,597.51, a rise of +1.95% Monday.  
• The gains takes gold's 2026 gains to 6% already, and sees bullion reach overbought on the 14 day relative strength index.  
• Rising tensions in Iran, adding to the already difficult situation in Venezuela may not have been enough to derail equities, but continues to give gold a boost.  
• News hit Monday of the US central bank being served with grand jury subpoenas from the Justice Department relating to the renovations of the Fed's headquarters and saw USD weakness Monday with the threat of criminal charges looming, providing another shot in the arm for bullion.  
• As usual at the beginning of each year, investment banks publish their forecasts.  Following last year's rally surprising many, key strategists are revising up their 2026 outlook.
• Additionally, gold investors remain focused on the upcoming CPI report from the US as their next guide for interest rates.  Expectations for a rate cut have fallen away in recent data releases with virtually nothing priced in for the January 29 decision.  

source:  MNI, Bloomberg Finance LP, Reuters.  

NZGBs are 4-5bps cheaper after the release of the Q4 QSBO Survey.

• The Q4 NZIER (New Zealand Institute of Economic Research) Quarterly Survey of Business Opinion (QSBO) printed a little while ago and showed a strong improvement versus the Q3 result. This should increase confidence in the economic recovery taking hold in 2026 and adds to the case for a steady RBNZ hand in the near term (at the margin).
• US tsys finished slightly weaker on Monday amid uncertainty over future Federal Reserve independence. This after the DOJ announced it's investigation of Fed Chairman Powell over the weekend related to his testimony before the Senate Banking Committee last June.
• With US tsys only modestly cheaper overnight and ACGBs little changed, the NZ-US and NZ-AU 10-year yield differentials are 2bps and 4bps higher, respectively.  
• Consistent with the move in the NZ-AU 10-year differential, market expectations for the NZ-AU policy rate differential over the next year, as reflected in the AU–NZ 1-year forward 3-month swap (1Y3M) spread, has increased ~8bps versus Friday’s closing level.
• Swap rates are 2-5bps higher, with the 2s10s curve flatter.
• However, RBNZ-dated OIS pricing is, so far, little changed across meetings. No tightening is priced for February, while October 2026 assigns 20bps.

Bloomberg Finance LP

US President Trump has posted via Truth Social that any country doing business with Iran will be charged a 25% for all of the business they do with the US. The full Truth Social post is outlined below, with no timeline of when this comes into effect. At face value this could impact economies like India and also China. The move follows comments from Trump yesterday where he stated the US was considering its options around Iran, in the wake of protests (which overnight Iran claimed were being bought under control). However, it was also floated that there is the possibility of a meeting between the two countries. Via BBG/Axios: "Axios earlier Monday reported Araghchi and Witkoff discussed a potential meeting. The report, citing anonymous sources, described the move as an effort by Iran to deescalate tensions with the US or buy more time before Trump decides whether to take military action." 

• "Effective immediately, any Country doing business with the Islamic Republic of Iran will pay a Tariff of 25% on any and all business being done with the United States of America. This Order is final and conclusive. Thank you for your attention to this matter!"