BOBL TECHS: (M5) Corrective Cycle Remains In Play

• China's exports in USD terms outpaced estimates for March.  Up in USD terms +12.4%, the result dramatically exceeded +4.6% estimates and the -3.0% February contraction.   Of broader concern is the decline in imports, which contracted -4.3% YoY outpacing the forecast of -2.1%.  The trade balance unsurprisingly surged to USD$102.6bn.  The export data no doubt is inflated as exporters looked to get ahead of the tariffs now announced and March may prove to be an anomaly.  The decline in imports speaks loudly as to the general malaise for the domestic consumer, something that is expected to predict further monetary policy easing soon. (source MNI – Market News)
• Over the weekend, China reported new loans data which pointed to positive signs for the domestic economy.  China's January-February New Yuan loans were CNY9.78tn versus an estimate of CNY9.14tn following prior period of CNY6.138tn.  Aggregate financing was also strong up CNY15.18tn, from CNY9.292.1tn February.  A stronger than expected lending to businesses coupled with very strong government bond issuance suggests that things are moving forward in an economy challenged by the weight of a downturn in property.  The authorities have been clear in their intent of supporting the economy, as evidenced by the weight of government bond issuance.  The PBOC's deputy governor Xuan's speech while meeting with Japan and South Korean bank leaders last week, indicated China's intent is to implement moderately loose monetary policy.  What that is likely to look like could be a modest cut to the financing rate for 7-day reverse repurchase agreements via the open market operations and an expected cut the reserve requirement ratio (RRR) this quarter. (source MNI – Market News)
• The Hang Seng led the way today rising +2.4%, with the CSI 300 up +0.47%, Shanghai up +0.86% and Shenzhen up +1.5%.
• Yuan Reference Rate at 7.2110 Per USD; Estimate 7.3185
• China bonds did very little today  with the 10YR at 1.66%

ACGBs (YM -6.0 & XM flat) are cheaper but sit well above Sydney session cheaps.

• With the local calendar light today, cash US tsys have proved to be the key driver of today’s local market fluctuations. Cash US tsys are 2-3bps richer, with a steepening bias, in today's Asia-Pac session after Friday's heavy session.
• Last week, the US 10-year yield rose almost 50bps in 5 days, one of the biggest moves in that number of days since 1998. The US calendar is light this week, with the highlights being Retail Sales data and Fedspeak from Powell and Waller on Wednesday.
• Cash ACGBs are flat to 6bps cheaper with the AU-US 10-year yield differential at -7bps.
• Swap rates are 2bps lower to 6bps higher, with the 3s10s curve steeper.
• The bills strip has bear-steepened, with pricing -2 to -7.
• RBA-dated OIS pricing is 2-11bps firmer across meetings today. A 50bp rate cut in May is given a 39% probability, with a cumulative 118bps of easing priced by year-end (based on an effective cash rate of 4.09%).
• Tomorrow, the local calendar will see the release of the RBA Minutes for the April Meeting.
• The AOFM plans to sell A$1000mn of the 3.50% 21 December 2034 bond on Wednesday.

• RES 4: 120.20 High Dec 12 ‘24 (cont)           
• RES 3: 120.000 Psychological round number          
• RES 2: 119.960 High Apr 7 and the bull trigger
• RES 1: 119.470 High Apr 11                                    
• PRICE: 118.860 @ 05:58 BST Apr 14  
• SUP 1: 118.253/117.680 20-day EMA / Low Apr 9 / 1       
• SUP 2: 117.410 Low Mar 27   
• SUP 3: 117.126 76.4% retracement of the Mar 6 - Apr 7 bull cycle  
• SUP 4: 117.080 Low Mar 25 and a key short-term support    

Bobl futures remain below their recent highs. The latest move down - for now, appears corrective. The early April rally resulted in a break of key resistance at 119.040, the Feb 28 high. This strengthens bullish conditions and signals scope for a continuation. The focus is on the 120.000 handle next. The contract is overbought, a move down is allowing this condition to unwind. Initial firm support lies at 117.680, the Apr 9 low.