JGB TECHS: (M5) Rallies Off Lows

Aussie and kiwi underperformed the G10 on Tuesday despite stronger equities but it appears that continued uncertainty over the progress of US trade negotiations especially with China weighed on risk-sensitive currencies. AUDUSD trended lower through the European and US sessions falling 0.7% to 0.6384, around where it is now, following a low of 0.6376. The USD index was 0.2% higher.

• AUDUSD held above initial support at 0.6344 on Tuesday. The trend condition remains bullish despite yesterday’s sell off. Initial resistance is at 0.6450.
• AUDJPY was trading around 91.40 and then it fell to 90.59. It finished down 0.5% to 90.85. The pound was another outperformer leaving AUDGBP down 0.5% to 0.4761 following a low of 0.4755. AUDEUR is down 0.4% to 0.5607 after falling to 0.5590.
• AUDNZD was little changed on the day. It fell to 1.0744 but finished slightly higher at 1.0762.
• Equities were mixed with the S&P up 0.6% and FTSE +0.6% but Euro stoxx down 0.2%. Oil prices fell further with WTI -3.1% to $60.14/bbl. Copper was down 0.6% and iron ore remains around $98/t.
• Q1 CPI data print today and the trimmed mean is forecast to return to the RBA’s band for the first time since Q4 2021. Private credit for March is also released.

The NZD had a range overnight of 0.5927 - 0.5979, Asia is opening around 0.5935.

• The USD traded higher across the board as President Trump gives his first 100 days speech, being in the heartland of US Automakers there have been reports his administration will lessen the impacts of Auto tariffs.
• US consumer confidence fell to a nearly five-year low in April on tariff concerns. Job openings fell to the lowest level since September.
• “China responded to US Treasury Secretary Scott Bessent by urging countries against giving in to US tariff threats, saying it would only embolden the “bully”.”(per BBG)
• The NZD continues to consolidate on a 0.5900 handle.
• The price action continues to suggest that dips will probably find demand, first support on the day is 0.5900 then 0.5800/50.
• CFTC data show Asset managers have slowed their pace of buying last week, Leveraged funds though have been using dips to reduce their shorts. 
• Data : ANZ Activity Outlook, Business Confidence.

Fig 1: NZD/USD Spot Daily Chart

Source: MNI - Market News/Bloomberg

Bloomberg reported that there was a US crude inventory build of 3.8mn barrels last week, according to people familiar with the API data. 674k barrels were added at Cushing. Products continued to destock with gasoline down 3.1mn and distillate 2.5mn. The official EIA data is out on Wednesday.