AUSSIE BONDS: Modest Bull-Flattener, Subdued Session Despite Jobs Data

One of the key IPO's in Asia this year is EV battery marker CATL.  Making its trading debut this week in Hong Kong CATL's shares jumped 14% even after its initial pricing was at the top end of expectations.  

This gave a boost to the Hang Seng which had fallen for three days straight prior to CATL's first day of trading, as it delivered a strong rally.  

• China's Hang Seng is up +1.29% today taking back the losses incurred over recent days.  The CSI 300 was up +0.62%, the Shanghai Comp up +0.38% and the Shenzhen Composite is up +0.86%.
• The KOSPI barely moved today as it lacked direction and rose just +0.03% after yesterday's fall of -0.89%.
• The FTSE Bursa Malaysia KLCI index is lower by -0.42% as the index falls for a fourth straight day despite stronger than expected trade data today.  
• Indonesia's Jakarta Composite has rallied 18 out of the last 20 trading days and is up again today by +0.36%.
• Singapore's FTSE Straits Times is up +0.19% and the PSEi in the Philippines is lower by -1.5%.  
• India's NIFTY 50 continued to fall for a third straight day, down -0.20%.

NZGBs closed showing a modest bull-flattener, with benchmark yields 1-3bps lower. 

• Nevertheless, the NZ-US 10-year yield differential widened 3bps.
• The local market was closed at the time of the RBA decision. As a result, the post-RBA rally in ACGBs—driven by the rate cut and dovish shift—may positively influence NZGBs when trading resumes tomorrow morning.
• Cash US tsys are slightly cheaper in today's Asia-Pac session after yesterday's modest gains.
• (Bloomberg) -- Switzerland’s central bank chief gave a vote of confidence to US government bonds even after the world’s biggest economy was stripped of its last top credit rating by Moody’s.
• “US Treasuries are very liquid,” Swiss National Bank President Martin Schlegel said Monday in Lucerne. “There is currently no alternative to them and it’s not foreseeable that there will be an alternative.”
• Swap rates closed 2-5bps lower, with the 2s10s curve flatter.
• RBNZ dated OIS pricing closed little changed across meetings. 25ps of easing is priced for May, with a cumulative 63bps by November 2025.
• Tomorrow, the local calendar will see Trade Balance data ahead of the Budget on Thursday.
• On Friday, the NZ Treasury plans to sell NZ$250mn of the 3.00% Apr-29 bond, NZ$150mn of the 3.50% Apr-33 bond and NZ$50mn of the 1.75% May-41 bond.

• RES 4: 1.1625 1.500 proj of the Feb 28 - Mar 18 - 27 price swing
• RES 3: 1.1608 High Nov 9 2021
• RES 2: 1.1440/1573 High Apr 23 / 21 and the bull trigger
• RES 1: 1.1293/1381 High May 9 / High May 2 - 6  
• PRICE: 1.1243 @ 06:00 BST May 20
• SUP 1: 1.1102/65 50-day EMA and a pivot level / Low May 12 
• SUP 2: 1.1026 38.2% retracement of the Feb 3 - Apr 21 bull cycle 
• SUP 3: 1.0943 Low Apr 10    
• SUP 4: 1.0857 50.0% retracement of the Feb 3 - Apr 21 bull cycle

EURUSD continues to trade above last week’s low and recent weakness appears corrective. A key support at the 50-day EMA, at 1.1102, remains intact. A clean break of this average would undermine the uptrend and highlight a stronger reversal. Key trend signals still highlight an uptrend. A key resistance to watch is 1.1381, the May 2 - 6 high. Clearance of this level would signal the end of the correction and highlight a bullish break.