INDIA: India Updated Swaps Pricing  Vs. Pre-RBI Meeting Levels

• China's bond futures are trending lower today as the major equity bourses struggle.  
• The 10YR bond future is down -0.03 at 109.11 and remains above the 20-day EMA of 108.92.  
• The 2YR bond future is down -0.005 at 102.53 and is near the mid-point between the 100-day EMA of 102.62 and the 50-day EMA of 102.50.
• The 10YR CGB is stable at 1.69%

With the odds of the US becoming involved in the war against Iran increasing everyday, the upward momentum of US equities seem to be stalling. ESU5 -0.48%, NQU5 -0.52%. With positioning extreme, USD/JPY has uncharacteristically remained better bid. The JPY has fared better in the crosses as the move higher in many of them stall.

• EUR/JPY - Overnight range 166.71 - 167.61, Asia is trading around 166.90. The move higher ran into some supply around the 167.50 area overnight, stalling its upward momentum. Dips look likely to remain supported for now, with first support seen back towards the 165/66 area.
• GBP/JPY - Overnight range 194.92 - 196.62, Asia trades around 195.00. GBP/JPY had a failed break above the multiple tops around 196.50, it is trading back within its 192.00 - 196.50 range support seen initially toward 194.00.
• NZD/JPY - Overnight range 87.29 - 87.99, Asia is currently dealing 87.45. NZD/JPY failed to break back above 88.00 overnight, a sustained break is needed above here for the market to turn its focus back to the 90.00 area.
• CNH/JPY - Overnight range 20.1063 - 20.2278, Asia is currently trading around 20.1950. CNY/JPY trades sideways for now in a 19.70 - 20.30 range.

Fig 1 : GBP/JPY Daily Chart

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

Westpac Q2 consumer confidence picked up to 91.2 from 89.2 in Q1, while the number of pessimists declined they continue to outnumber optimists with the breakeven-index 100. Sentiment also remains below Q4 2024’s 97.5. Households remain cautious about the outlook despite 225bp of RBNZ easing given heightened global uncertainty, an unbalanced recovery and a soft labour market.

• While most regions saw a rise in consumer confidence, only one posted a reading above 100.
• Present conditions remained weak at 81.7 up from 80.2 with the assessment of current financial conditions falling to -27 from -24.1. Westpac notes that finances are being impacted by rises in living costs. Q1 CPI inflation rose 2.5% y/y up from 2.2% while May data showed food and electricity inflation rising further.
• The outlook is more positive with expected conditions rising 2.3 points to 97.5, still below the 10-year average, and the expected financial situation improving 2.6 points to 7.4.
• It is still not a “good time to buy” a major item but it improved 6.1 points to -9.5 but the 10-year average is at +4.5. Recent consumption data have been lacklustre and show that households remain cautious. The Westpac survey found that a net 31% have reduced discretionary spending.

NZ consumer outlook