MNI EXCLUSIVE: MNI Discusses RBNZ's Future Moves

Early G10 FX trends are skewed towards safe haven and EUR gains. The BBDXY index is back off 0.20%, last near 1232. This leaves us within recent ranges though. US equity futures are down, led by the tech side, as Nvidia stated it would take a charge due to chip export restrictions to China. 

• USD/JPY is back under 143.00, last near 142.80, up 0.30% for the session. USD/CHF is down more, last at 0.8180/85, up 0.60% in CHF terms (liquidity in Asia Pac trading may be a factor). For USD/JPY recent lows are close to 142.00, for USD/CHF we printed 0.8100. EUR/USD was last at 1.1315, so still some distance from recent highs at 1.1473.
• Eminis are down close to 1%, while US Nasdaq futures are off nearly 1.55%. The Nvidia news has weighed on broader chip related tech sentiment. Headlines also crossed earlier of a US probe into critical minerals ahead of potential tariffs.
• US Tsy yields are lower, led by the front end, with the 2yr back to 3.81%, off 3bps, the 10yr is back to 4.32%.
• Japan machine orders data was stronger than forecast, but Feb prints pre-date recent US tariff announcements. BoJ Governor Ueda stated that the US tariff outlook is moving towards the 'bad scenario' in terms of what the central bank envisaged (via Sankei/Rtrs).
• AUD/USD is lower, last near 0.6335/40, while NZD/USD is little changed, just under 0.5900. This leaves the AUD and NZD lagging the safe havens, which is line with the early US equity risk off.
• Coming up we have China home prices for March, followed by Q1 GDP and March activity figures. 

Bidding at today's A$1000mn of the 3.50% 21 December 2034 bond, issue #TB168, is likely to be shaped by several key factors:

• The current outright yield is roughly 20bps below the previous auction level and around 40bps lower than the late-2024 peak. The line was last issued on 26 March 2025 for A$800bn.
• The 3s/10s yield curve has steepened sharply over the past week or so, now sitting at its steepest level since late 2021.
• Demand for duration is likely to benefit from the recent rebound in sentiment toward longer-dated global bonds, following last week’s sharp sell-off.
• The line is included in the XM basket.
• While some factors may limit the overall strength of bidding, there is an expectation of continued firm pricing at today's auction.
• Results are due at 0200 BST / 1100AEST.

The Australian Office of Financial Management (AOFM) will today sell A$1000mn of the 3.50% 21 December 2034 bond, issue #TB168. The line was last sold on 26 March 2025 for A$800bn. The last sale drew an average yield of 4.4640%, at a high yield of 4.4640% and was covered 3.7250x. There were 42 bidders, 15 of which were successful and 7 were allocated in full. The amount allotted at the highest yield as a percentage of the amount bid at that yield was 96.0%.

• This week's ACGB supply is smaller than the recent average weekly issuance of $1500mn, with today issuance the only one for the week.
• According to the Budget 2025-26 Issuance Program Update from the Australian Office of Financial Management (AOFM), total issuance of Treasury Bonds (including Green Treasury Bonds) in 2025-26 is expected to be around $150 billion. Issuance of Treasury Indexed Bonds by tender is expected to be between $2 billion and $3 billion (additional issuance by syndication may be considered).
• For 2024-25, issuance of Treasury Bonds has been revised to around $100 billion, including around $2 billion of Green Treasury Bonds. Treasury Indexed Bond issuance will be around $3 billion.
• The previous round of ACGB Dec-34 supply saw the recent run of strong pricing at ACGB auctions continue with the weighted average yield printing through prevailing mids. Moreover, the cover ratio improved to 3.7250x from 3.1688x.
• Results are due at 0200 BST / 1100AEST.