US: More Countries To Receive Trade Details Wednesday US Time - Trump

JGB futures (for June) ended post Tokyo Trade at 139.11, -.24 versus settlement levels on Friday. We did see negative spill over from weaker US Tsy futures after the NFP/wages print. Earlier in Friday trade, the June future spiked towards 139.65, which followed headlines that the central bank was considering a smaller reduction in its bond buying program (see this Bloomberg link). 

• For JGB technicals, a bearish theme remains intact. 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.
• The 10yr JGB yield finished up on Friday at 1.455%, which is close to Mid May lows. The 10yr swap rate was last near 1.24%.
• Coming up shortly on the data front we have the Q1 GDP revisions. Headline q/q growth is forecast unchanged at -0.2%. We also have BoP/trade balance data for April, along with May bank lending figures. The Eco watchers survey prints later.
• On the supply front we have a 6mth bill auction today. 

USD/CNH tracks near 7.1900 in early Monday dealings, not too far from session highs on Friday (7.1938). CNH lost 0.17% on Friday, as the USD rallied post firmer NFP/earnings data. USD/CNY spot finished up at 7.1926 (down a similar amount to CNH). The CNY CFETS basket lost further ground to 95.58, down 0.18%. This puts the index back to fresh lows since 2023. 

• For USD/CNH spot, we remain within recent ranges. The 20-day EMA resistance point is close to 7.2000, while earlier June highs were at 7.2241. Recent lows rest at 7.1645.
• Trade talks between the US and China are set to resume today in London (see this Bloomberg link). China also reportedly approved some applications for exports of rare earths to the US, it will also reportedly speed up approvals for such exports to the EU, it was announced over the weekend (Bloomberg/Reuters).
• Locally today we get May inflation figures. With CPI headline expected to remain in negative territory (-0.2%y/y is the forecast). The PPI is also projected to remain negative (-3.2%y/y). Also due is May trade figures. Exports are forecast at 6.0%y/y (from 8.1% in April). 

NZDUSD trended lower through the European session and then approached 60c following the US payroll data reaching a low of 0.6007. It finished down 0.3% to 0.6016 but has started today slightly higher at 0.6022. The US labour market held up in May in the face of elevated trade uncertainty with the unemployment rate and hours worked stable. 

• Kiwi underperformed the Aussie moderately leaving AUDNZD up 0.1% to 1.0792. It is currently lower at 1.0788 as NZGB yields are slightly higher in early trading following USTs. Australia is closed.
• RBNZ Chief Economist Conway was interviewed today on Radio NZ and said that the central bank expects core inflation to moderate towards the 2% band mid-point by end-2025 going into 2026 despite the recent pickup in headline inflation. He also expects growth to improve later in the year helped by easier monetary policy, but the “labour market is pretty flat”.
• Q1 manufacturing volumes rose a strong 2.4% q/q up from 1.2% in Q4 while sales jumped 5.1% q/q after 3.0%. Q1 GDP prints on June 19.
• Equities rallied with the S&P up 1.0% and Euro stoxx +0.4%. NZX 50 is down about 0.1% today. Oil prices rose sharply with Brent +2.0% to $66.65/bbl. Copper fell 2% and iron ore is lower at around $95/t.