AUSSIE BONDS: Modestly Cheaper, Narrow Ranges Despite Upbeat Data

• RES 4: 132.42 2.000 proj of the May 14 - 20 - 22 price swing
• RES 3: 132.00 Round number resistance    
• RES 2: 131.95 High Jun 13 and the bull trigger 
• RES 1: 130.63/131.33 20-day EMA / High Jun 20
• PRICE: 130.30 @ 05:41 BST Jul 1
• SUP 1: 130.00 Low Jun 30              
• SUP 2: 129.67 76.4% retracement of the May 14 - Jun 13 bull leg  
• SUP 3: 129.30 Low May 22   
• SUP 4: 128.97 Low May 14 and a reversal trigger  

Recent weakness in Bund futures resulted in a print below key short-term support at 130.12, the Jun 5 low. A clear break of this price point would highlight a bearish threat, undermine the recent bullish theme, and signal scope for an extension towards 129.30, the May 22 low. Key resistance has been defined at 131.95, the Jun 13 high. Clearance of this level would reinstate a bullish theme.

NZGBs closed just off session bests, with benchmark yields 4-5bps lower. 

• Former RBNZ Acting Governor Grant Spencer has been appointed to the central bank board for a five-year term.
• (Bloomberg) ANZ Bank Chief Economist  Zollner no longer sees the RBNZ cutting the cash rate at the July 9 meeting, predicting instead it will keep the rate at 3.25%. “From there, we are now forecasting a cautious pace of cutting with 25bp cuts in August and November, with a third 25bp cut in February to 2.50%”: Zollner.
• (Bloomberg) BNZ no longer expects the RBNZ will cut the OCR next week, Head of Research Toplis says. Says the NZIER survey of business opinion was simply not weak enough to give confidence that the RBNZ will cut the OCR from 3.25%.
• Swap rates closed 4-6bps lower, with a flatter 2s10s curve.  
• RBNZ dated OIS pricing closed flat to 3bps softer across meetings. 4bps of easing is priced for July, with a cumulative 33bps by November 2025.
• Tomorrow, the local calendar will be empty.
• On Thursday, the NZ Treasury plans to sell NZ$225mn of the 4.50% May-30 bond, NZ$175mn of the 2.75% Apr-37 bond and NZ$50mn of the 2.75% May-51 bond.

The BBDXY has had a range of 1187.94 - 1190.09 in the Asia-Pac session, it is currently trading around 1189. The USD has traded sideways today after initially trying lower. CHINA CAIXIN PMI Surprises to the Upside: China's CAIXIN PMI Manufacturing in June rose to 50.4, ahead of an expected 49.3. The index was considerably up from the prior month's result of 48.3. This data captures the period post the agreement between the US and China on tariffs and potentially points to an improvement in activity. "US OFFICIALS WERE SEEKING PHASED DEALS WITH THE MOST ENGAGED COUNTRIES AS THEY RACE TO FIND AGREEMENTS BY JULY 9- FT - [RTRS]"

• EUR/USD -  Asian range 1.1778 - 1.1807, Asia is currently trading 1.1790. While the USD remains on the back foot the EUR will continue to be supported, first support is back towards 1.1600. This move seems to be accelerating and will now be looking towards 1.2000 and beyond.
• GBP/USD - Asian range 1.3718 - 1.3749, Asia is currently dealing around 1.3740.This move higher now looks to have broken convincingly and with the USD looking like it is set for another leg lower Cable could potentially now target levels back towards 1.4200. Short-term momentum seems to be stalling first support back towards 1.3600.
• USD/CNH - Asian range 7.1501 - 7.1596, the USD/CNY fix printed 7.1534 Asia is currently dealing around 7.1580. Sellers should be around on bounces while price holds below the 7.2500 area and the PBOC manages the fix lower.
• Cross asset : SPX -0.15%, Gold $3325, US 10-Year 4.208%, BBDXY 1189, Crude oil $64.78
• Data/Events : Italy Man PMI, France Man. PMI, Germany Man. PMI & Unemployment, EZ Man. PMI & CPI, 

Fig 1: GBP/USD Spot Hourly Chart

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