JAPAN: LDP Members Ballot Closed As Lawmakers Vote Looms (2/2)

Delayed reaction to the move lower in crude oil as bonds firm a little. Smooth passage of German 10-Year supply also noted.

• WTI & Brent lost a little over $0.80 apiece after RTRS sources noted that “OPEC+ will consider further raising oil production at a meeting on Sunday, as the group seeks to regain market share. Another boost would mean that OPEC+, which pumps about half of the world's oil, would be starting to unwind a second layer of output cuts of about 1.65 million barrels per day, or 1.6% of world demand, more than a year ahead of schedule”.

• The latest comments from RBA’s Bullock on the current trend of spending potentially needing fewer rate cuts are underpinning some modest AUD strength today, which continues to be most notable against its antipodean counterpart. AUDNZD is back to the overnight session highs, and the highest level in six months.
• Initial strength for the cross during the APAC session followed a solid Q2 GDP reading in Australia. Data was stronger than both the RBA and consensus expected as it rebounded from Q1’s weather-impacted soft result and benefited from holidays. It rose 0.6% q/q to be up 1.8% y/y, the strongest since Q3 2023.
• The other leg of the trade has been fuelled by a dovish RBNZ, prompting AUDNZD to surge higher in recent weeks, breaking back above 1.1000 convincingly, and a breach of the key 1.1180 mark would place the cross at the highest level since late 2022. Above here, 1.1250 marks a significant 76.4% retracement point of the 2022 selloff.
• It is worth noting that S&P made comments on New Zealand overnight, stating they are “comfortable” with NZ’s sovereign rating outlook, though it’s closely watching the nation’s current account and budget deficits.

Source: Bloomberg Finance L.P. / MNI

• EUR/USD: $1.1455(E2.2bln), $1.1525(E919mln), $1.1575-95(E1.5bln), $1.1600(E825mln), $1.1645-50(E792mln), $1.1675-80(E1.1bln), $1.1700(E1.1bln)
• USD/JPY: Y145.00($865mln), Y145.50($976mln), Y146.50($1.4bln), Y147.15-30($1.6bln), Y148.00($595mln), Y149.00($508mln)
• GBP/USD: $1.3500(Gbp507mln)
• AUD/USD: $0.6475(A$570mln)