AUSSIE BONDS: Modestly Stronger, US Tsys Little Changed After A Volatile Session

In local morning trade, NZGBs are little changed, with the NZ-US 10-year yield differential 4bps wider, after US tsys finished with a bull-flattener.

• Rising Middle East tensions, including the possibility that the US will join the war, lent risk-off support for US tsys on Tuesday.
• Pres Trump: "We know exactly where the so-called “Supreme Leader” is hiding. He is an easy target but is safe there - We are not going to take him out (kill!), at least not for now. But we don’t want missiles shot at civilians, or American soldiers. Our patience is wearing thin. Thank you for your attention to this matter!"
• Otherwise, markets await Wednesday's FOMC policy announcement.
• NZ’s  current account deficit narrowed to NZ$2.32 billion in the first quarter (-NZ$2.2 billion est). The current account deficit was 5.7% of GDP in the 12 months through March, narrowing from a revised 6.1% in Q4.
• Swap rates are little changed.
• RBNZ dated OIS pricing is little changed across meetings. 4bps of easing is priced for July, with a cumulative 27bps by November 2025.
• On Thursday, the NZ Treasury plans to sell NZ$225mn of the 3.00% Apr-29 bond, NZ$175mn of the 2.75% Apr-37 bond and NZ$50mn of the 2.75% May-51 bond.

• RES 3: 147.74 - High Jan 15 and bull trigger (cont)
• RES 2: 146.53 - High Aug 6 
• RES 1: 141.48/142.95 - High May 2 / High Apr 7
• PRICE: 138.83 @ 15:15 GMT Jun 17
• SUP 1: 138.54 - Low May 22
• SUP 2: 136.57 - 1.382 proj of the Jan 28 - Feb 20 - Feb 26 bear leg   
• SUP 3: 134.89 - 2.000 proj of the Jan 28 - Feb 20 - Feb 26 bear leg

JGBs hold above recent lows, however a bearish theme remains intact following the reversal that started Apr 7. A continuation lower would signal scope for an extension towards 136.57, a Fibonacci projection. On the upside, a reversal higher would instead refocus attention on 142.95, the Apr 7 high. The first important resistance to watch is 141.48, the May 2 high. A break of this level would be viewed as an early bullish signal. 

• Bank of Korea to Sell KRW1tn 3-Year Bonds
• Vietnam To Sell VND 0.5Tln 2055 Bonds; (TD2555052)
• Vietnam To Sell VND 3.5Tln 2030 Bonds; (TD2530009)
• Vietnam To Sell VND 2.0Tln 2040 Bonds; (TD2540037)
• Vietnam To Sell VND 6.0Tln 2035 Bonds; (TD2535021)
• Thailand to Sell THB15bn of 2035 Bonds
• Thailand to Sell THB18bn of 2045 Bonds
• Bank Indonesia to Sell 31D SUVBI Bills
• Bank Indonesia to Sell 185D SUVBI Bills
• Bank Indonesia to Sell 94D SUVBI Bills
• Bank Indonesia to Sell 367D SUVBI Bills
• Bank Indonesia to Sell 276D SUVBI Bills
• China to Sell CNY170bn 2030 Bonds
• India to Sell CNY90bn 91-Day Bills
• India to Sell CNY50 bn 364-Day Bills
• India to Sell CNY50bn 182-Day Bills
• South Korea to Sell KRW2tn 63-Day Financial Bills