AUSSIE 10-YEAR TECHS: (M6) Stable Above Multiyear Lows

NZGBs are 2-3bps weaker after US tsys finished 2-3bps cheaper across benchmarks as markets continue to focus oil price & the US/Israel conflict with Iran. 

• Trump says the Iran operation is "going well," claiming that Iran's air force, navy, and air detection have all been "knocked out." Later adds, "their missile count is going way down." Trump appeared to walk back on Secretary of State Marco Rubio's suggestion that an imminent Israeli attack on Iran compelled the US to strike the country. "If anything, I might have forced Israel's hand," Trump says.
• Risk sentiment got a small jolt after Reuters headline reported that the US is "considering oil tanker insurance support to ease Mideast crude shipments".
• Bloomberg - "Average price for whole milk powder rose to $3,863 from $3,706 at the previous auction, according to the GlobalDairyTrade website."
• NZ Terms of trade rose 3.7% q/q (estimate -0.3%) in Q4.
• The local calendar will also see ANZ Commodity Price data today.
• Swap rates are 4bps higher.
• RBNZ-dated OIS pricing is little changed across meetings. No tightening is priced for April, while December 2026 assigns 34bps.
• On Thursday, the NZ Treasury plans to sell NZ$250mn of the 1.50% May-31 bond and NZ$200mn of the 4.5% May-35 bond.

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• Gold had ignored the USD moves at the beginning of the week but this changed during the USD session as DXY rose +0.6% and gold fell -4.2%; its biggest one day decline since the first trading day of February.  
• Gold had traded for much of the day in a tight range touching a high of $5,380 but reached a tipping point as DXY touched 99.68, sending gold down.  
• Bullion's fall tested $5,000 but bounced to finish at US$5,088.  
• The moves show that the one way traffic that gold exhibited for much of 2025 and early January may no longer exist and that despite it's safe haven status, prices will remain sensitive to the USD.  
• From a technical standpoint, the leaves gold near to its downside resistance from the 20-day EMA at $5,077.  A break below brings $5,000 into consideration again and below that the 50-day EMA of $4,850.
• The mass cancellation of flights to and from bullion hub Dubai has left traders unable to move their metal, highlighting the potential bottlenecks to physical gold flows that could emerge from war in the Middle East (per BBG).  

The USD/JPY range overnight was 157.15-157.97, Asia is currently trading around 157.70, +0.20%. The days of the Yen being a safe-haven looks like they have passed, and the momentum higher has been re-asserted as it reacts to the combination of higher oil and a reinvigorated USD. The pair is now looking to re-challenge the 158.00 area. On the day, with the upward momentum reasserted dips are likely to again be supported, first support is back toward 156.50-157.00 and then 155.50. A break above 158.00 and the market will again be looking toward the 160.00 area and then beyond, the jaw-boning by officials has started to increase but for now I think we are still a fair way away from them getting involved. 

• Bloomberg - “USD/JPY rose as much as 0.4% to 157.97, the highest since Jan. 23 when a rate check was conducted on the yen; the Japanese government is monitoring market movements with the utmost vigilance and will take all necessary measures in close cooperation with overseas authorities, Finance Minister Satsuki Katayama.”
• MNI BRIEF: BOJ's Ueda Reveals Blockchain Settlement Project. The Bank of Japan has launched a sandbox project to explore the use of central bank money for a broad range of settlements on blockchain-based systems, said Governor Kazuo Ueda.
• Options : Close significant option expiries for NY cut, based on DTCC data: 155.00($1.12b). Upcoming Close Strikes : 153.25($1.27b March 6), 155.00($1.41b March 9) - BBG.
• The USD/JPY Average True Range(ATR) for the last 10 Trading days: 119 Points
• Data/Event : Japan February S&P Global Composite and Services PMIs, Japan February Consumer Confidence Index

Fig 1 : USD/JPY Spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P