CANADA DATA: July GDP Beats Expectations, But Q3 Recovery Still Looks Tepid

• Weakness for the New Zealand dollar standing out across the G10 complex today, and despite the most recent bounce, spot has narrowed the gap to the pre-Powell lows overall, located at 0.5800.
• Friday’s low print adds to the medium-term significance of this level, which has proven an important pivot point dating back to late 2023. A break of the figure will be required for a deeper selloff, potentially targeting a move to 0.5728, the 61.8% retracement of the Apr/Jul rally.
• Firmer-than-expected Australian CPI data was largely shrugged off by the market, however, it has provided another boost for AUDNZD, which has extended its August rally to just under 2%. A break above 1.11 has placed the cross at fresh 6-month highs, placing renewed focus on key medium-term resistance at 1.1180.
• On the domestic calendar, monthly filled jobs data is scheduled early Thursday, before ANZ activity outlook, business and consumer confidence figures cross.  

EUR/AUD breaking to new daily lows in recent trade (and through the WMR fix) - this puts the price clear of both the 50-dma at 1.7893 and likely avoids the formation of support at a possible uptrendline drawn off the February lows.

• Worth noting today marks month-end value date given Aug31st falls on a Sunday, so could tie-in some month-end flow to recent moves.
• Similarly, equities remain firm, helping aide AUD strength here: AUD/USD is back to flat, reversing the day's losses of ~0.4%.

• USD2bln WNG of the new 3.75% 5-year Sep-30 ESM-Bond
• Spread set earlier at SOFR MS+39 (SA 30/360) (guidance was SOFR+40 Area, IPT was MS+42 area, that was equiv. to CT5 + ~7.3bp)
• Books closed in excess of $13.3bn excl. JLM interest
• Reoffer 99.855 to yield 3.782%
• Issuer: European Stability Mechanism (TICKER: ESM)
• Issuer Ratings: Aaa (stable) (Moody's) / AAA (stable) (S&P) / AAA (stable) (Fitch)/ AAA (stable) (Scope)
• Format: Registered Notes, Reg S (NSS) / 144A
• Ranking: Senior, Unsecured, Unsubordinated
• Listing: Luxembourg
• Settlement: 4 September 2025 (T+6 (TARGET) / T+5 (NY))
• Maturity Date: 4 September 2030 (5Y)
• HR 101% vs CT5 (T 3 ⅞ 07/31/30 )
• ISIN: Reg S: XS3171756128 / 144A: US29881WAG78
• Coupon: 3.75%, Fixed, Semi-annual, 30/360, Following, Unadjusted
• Bookrunners: CACIB(DM/B&D) / DB / JPM

The transaction comes ahead of a USD3bln redemption for the ESM in September. That line also had a 5-year maturity initially.