JGB TECHS: (M5) Rallies Off Lows

The overnight range was 142.36 - 143.93, Asia is currently trading around 143.20, a decent bounce after headlines on BBG - "US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer will meet with the Chinese government in Switzerland to restart trade talks between the two nations."

• “The Bank of Japan will begin its own corporate wage survey. As the Bank of Japan aims to realize a virtuous cycle in which wages and prices rise together, there is a strong concern that wage increases at small and medium-sized enterprises that do not have labor unions and are not included in the Rengo survey are weak.” - Kyodo News via BBG
• The FOMC today will be watched closely, MNI Economist - “The FOMC will extend its series of rate holds to a third meeting in May, keeping the Fed funds target rate at 4.25-4.50% while maintaining its forward guidance in the Statement. As the FOMC awaits clarity in both government policy and the data on the degree to which one if not both dual mandate targets will be missed, most participants will continue to support a holding pattern until there is a clearer signal to act. Don’t anticipate any meaningful changes in the Statement, though any signal that the Fed is looking seriously at “soft” survey data to assess the outlook could be significant.”
• The USD continued to trade very poorly across the board overnight, this morning's headlines about an official meeting between the US and China has seen USD/JPY bounce back above 143.00. Let's see if it can hold these gains.
• Traders will be watching the long term pivotal area around 140.00. A break would really see this move accelerate, opening up a bigger move back to 125/130.
• CFTC data shows Asset managers continuing to add to already significant JPY longs, leveraged funds seems to have pared their shorts back a little.
• Data : JN Jibun Bank PMI’s, US FOMC 

Fig 1 : USD/JPY Spot Daily Chart

Source: MNI - Market News/Bloomberg

• After several days of relative calm equities slipped overnight as markets remain unclear as to the path of trade policy and general cautiousness ahead of the FED meeting Wednesday.
• In a meeting with the newly elected Canadian Prime Minister Mark Carney, US President Trump suggested that China is eager to negotiate due to its ‘struggling’ economy but emphasized the talks would take place at the right time.
• This further muddies the water on global trade as Chinese authorities make counter claims and deny rumours that they are the ones ‘reaching out’ to the US.
• As US equities declined and bonds rallied, gold jumped to new highs reaching US$3,431.77
• With some modest profit taking into the US close, gold has opened this morning in the Asia trading day at $3,431.60 and is down modestly at the open.
• Another Central Bank reported overnight that their gold reserves are on the increase with the Central Bank of Ghana’s gold reserves up by 31 tonnes in March.
• As gold does not pay interest it can be highly sensitive to interest rates as that dictates the borrowing cost to buy gold. Gold markets will watch carefully tonight as the push pull on rates continues with the White House demanding a rate cut and the FED talking more neutral 

• Bank of Korea to Sell KRW2tn 2-Year Bonds
• Bank Indonesia to Sell 32D SUVBI Bills
• Bank Indonesia to Sell 367D SUVBI Bills
• Bank Indonesia to Sell 185D SUVBI Bills
• Bank Indonesia to Sell 94D SUVBI Bills
• Bank Indonesia to Sell 276D SUVBI Bills
• Vietnam To Sell VND 0.5Tln 2055 Bonds; (TD2555052)
• Vietnam To Sell VND 1.0Tln 2040 Bonds; (TD2540037)
• Vietnam To Sell VND 2.0Tln 2030 Bonds; (TD2530009)
• Vietnam To Sell VND 7.0Tln 2035 Bonds; (TD2535022)
• Singapore to Sell S$7.4 Billion 182-Day Bills on May 7
• India to Sell INR50bn 182-Day Bills on May 7
• India to Sell INR90bn 91-Day Bills on May 7
• India to Sell INR50bn 364-Day Bills on May 7
• South Korea to Sell KRW2tn 63-Day Financial Bills