US TSYS: Muted Start
Cash tsys have opened dealing little changed across the major benchmarks in a muted start to Wednesday's dealing. Asia-Pac participants are digesting yesterday's moderate curve flattening, tsys came off session lows as risk sentiment improved in the NY session. TYU3 deals at 114-00+, +0-07+, a 0-02+ range has been observed thus far.
- RBA's Gov Lowe is speaking at the moment however there has been little spillover as of yet.
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US TSYS: Cheaper Start
Cash tsys have opened dealing ~1bp cheaper across the major benchmarks. Local participants are perhaps focusing on the headline number of Friday's NFP which saw the unemployment rate tick unexpectedly lower. TYM3 deals at 115-22, -0-01, with 0-05+ range observed thus far.
- A thin data calendar in Asia today leaves participants on headline watch.
AUD: AUD/EUR: Holding Above 20-Day EMA
Improving risk sentiment on Friday saw AUD/EUR continue to recover from cycle lows, bulls have held above the 20-Day EMA as the pair printed its highest level since April 21.
- We now sit ~3% above cycle lows seen late in April at €0.5959, the 20-Day EMA had been a key resistance for bulls to clear since breaking below the measure in February.
- Bulls now target a break of €0.62, which opens up the 200-Day EMA (€0.6371).
- Bears look to test year to date lows (€0.5959). From here €0.5867 the 50% retracement of the 2020-2022 Bull leg is the next downside support level.
Fig 1: AUD/EUR Daily Spot, EMAs
Source: MNI/Bloomberg
JPY: Yen Weaker Early Doors
Yen is trading lower early doors in the Monday Asia Pac session. We have lost close to 0.30% since the open, putting USD/JPY back into the 135.20/25 region, which is above highs from Friday's session post the US payroll print. Note Japan markets return today after a 3-day break. The yen is underperforming both AUD and NZD, with NZD/JPY back to 85.15/20.
- Headline flow has been light, with some focus likely to be on EU plans to sanction China companies aiding the Russian war with Ukraine (per the FT). Some of the companies are already reportedly sanctioned by the US, so the fallout from a broader risk sentiment perspective may not be large.
- US equity futures opened higher, but are away from best levels. Eminis last just near 4153 (+0.06%).
