US TSYS: Long End Leads Yields Lower On A Patient Fed
TYM5 reopens at 111-18+, up 0-01 from closing levels in today’s Asia-Pac session.
- Overnight US 10-year yields had a range of 4.2577% - 4.3335%, closing near the lows.
- Treasury yields ended mostly lower overnight reacting to Powell's wait and see approach. The move was led by the long end, resulting in the yield curve flattening.(2s10s +2.09 at 48.679).
- Treasuries finished higher after the Federal Reserve held rates steady at 4.25-4.5%, calling for patience as the US economy is still solid. "The labor market is solid. Inflation is low. We can afford to be patient as things unfold. There's no real cost to our waiting at this point.”
- The 10-year Yield range seems to be 4.10% - 4.45%, price is back at the 4.25/30% support/pivot within that range. Awaiting the next catalyst for some direction.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
NZD: The Flightless Bird?
A day of extreme volatility with liquidity seeming to dry up. Once the dust settles though the NZD is still hovering just above its pivotal 0.5500 Support and continues to trade heavy.
- Yesterday's range was 0.5507 - 0.5626, Asia opened near the lows around 0.5540.
- The RBNZ is expected to lower its key rate to 3.5% tomorrow. The market is starting to think they might need to do more as trade tensions threaten the economy.
- NZ announced it would be lifting defense spending to 2% of GDP over 8 years.
- The NZD initially found some support yesterday as Chinese policy makers discussed ways to combat the tariffs and considered moving forward some measures that had been discussed. This increases the potential of China fast tracking both monetary and fiscal stimulus.
- Technically the NZD continues to hold the 0.5500 support area, but price continues to trade heavy just above it..
- The CFTC data shows both leverage funds and asset managers are running historically large short positions, if risk continues to melt down, expect these to be added to.
- On the day expect sellers to participate in any bounce back towards 0.5650/0.5700. All eyes though will be watching the key 0.5500 area for signs it might give way..
- RBNZ rate decision on Wednesday.
NZDUSD
Source: MNI - Market News/Bloomberg
AUSSIE 3-YEAR TECHS: (M5) Rips to New Highs
- RES 3: 97.190 - High May 5 2023
- RES 2: 96.932 - 76.4% of Mar-Nov ‘23 bear leg
- RES 1: 96.860 - High Apr 07
- PRICE: 96.580 @ 16:36 GMT Apr 07
- SUP 1: 95.900 - Low Jan 14
- SUP 2: 95.760 - Low 14 Nov ‘24
- SUP 3: 95.480 - Low Jan 11 2023 and a major support
Aussie 3-yr futures ripped to new contract highs again to begin the week - clearing resistance on the continuation contract. The rally has taken out resistance at 96.730, the Sep 17 ‘24 high. On the downside, any reversal lower from current levels would signal a resumption of a downtrend. A deeper sell-off would refocus attention on 95.760, the 14 Nov ‘24 low.
USDCAD TECHS: Corrective Bounce
- RES 4: 1.4452/4543 High Mar 13 / 4 and a bull trigger
- RES 3: 1.4415 High Apr 1
- RES 2: 1.4304 50-day EMA
- RES 1: 1.4296 Intraday high
- PRICE: 1.4225 @ 16:58 BST Apr 7
- SUP 1: 1.4028 Low Apr 3
- SUP 2: 1.3986 Low Dec 2 ‘24
- SUP 3: 1.3944 61.8% retracement of Sep 25 ‘24 - Feb 3 bull run
- SUP 4: 1.3894 Low Nov 11 ‘24
USDCAD has recovered from last week’s low. For now, the move higher appears corrective. The sell-off last week confirmed a clear reversal of the bull cycle between Sep 25 ‘24 and Feb 3. Price has traded through a key support at 1.4151, the Feb 14 low, and this signals scope for an extension towards 1.3944, a Fibonacci retracement. On the upside, key short-term resistance is seen at 1.4304, the 50-day EMA.
