NZD: NZD/USD - Trying To Bounce, Look For Sellers Back Above 0.5900 Again

TYU5 reopens at 110-28, down 0-03+ from closing levels in today’s Asia-Pac session.

• Friday night the US 10-year yield had a range of 4.3799% - 4.4257%, closing around 4.388%. 
• Treasury yields ended mixed  on Friday night; the yield curve flattened(2s10s -1.50 at 46.036, 5s30s -0.24 at 97.162).
• MNI FED WATCH: Rates On Hold As Possible Fall Cut Considered. The Federal Reserve is expected to keep its benchmark overnight interest rate in the 4.25%-4.5% target range Wednesday as policymakers continue to inspect U.S. data for tariff pressures on prices, hiring and economic activity. Their outlook and remarks will likely remain little changed from that of the June FOMC meeting, when one group signaled a desire to cut twice this year and another to wait until next year. 
• MNI US DATA: Slowing Momentum In Core Durables Orders Points To Softer Investment. June's advance durable goods report showed renewed weakness in core orders to end Q2, a potential sign of softer business investment and manufacturing in the months ahead.
• The 10-year yield has moved back towards its pivot within the wider range 4.10% - 4.65%, expect supply around 4.30/35% first up. A decent bounce off its support but the move has failed to follow through above 4.40% for now.

Fig 1: 10-Year US Yield Hourly Chart

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

Today NZ filled jobs for June print which will round out the quarter and give an indication for the direction of Q2 employment which prints on August 6. Filled jobs rose only 0.1% m/m in May and fell 0.3% in April and so the labour market likely remained soft in Q2.

• In other data ANZ business confidence for July is released on Wednesday. It continues to point to a gradual recovery in the economy. Cost and price components remain elevated and inflation expectations at 2.7% off their low.
• ANZ July consumer confidence is out on Friday. It rose sharply in June to 98.8, the highest this year but still off December’s 100.2. Rate cuts, which take time to feed through to mortgage payments, have helped with households’ financial situation and improved the time to buy component.
• June building permits also print on Friday. They rose 10.4% m/m in May and indicators suggest that the construction sector is recovering. 

The AUD/USD had a range overnight of 0.6551- 0.6583, Asia is trading around 0.6575. The pair traded with a heavy tone all through Friday but has bounced this morning as the market gets news of a US-EU trade deal. The pair failed to gain any momentum above 0.6600 last week and now awaits a very busy calendar this week which could have meaningful implications for risk. Locally the Australian Q2 CPI on Wednesday will be closely watched and could provide a catalyst for some movement. Worth keeping in mind we are approaching the corporate month-end so there could be a demand for some USD’s today but more likely that flow will be done tomorrow.

• (Bloomberg) -- Iron ore shipments from Australia’s largest bulk-export terminal swelled to a record in June, in a sign of ample seaborne supplies just as concerns mount about the outlook for Chinese demand.
• “China and the US will pause tariffs for another 90 days, the SCMP reported.” - BBG
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6600(AUD608m), 0.6550(AUD555m). Upcoming Close Strikes : 0.6600(AUD968m July29), 0.6600(AUD1.38b July 31), 0.6465(AUD1.01b July31) - BBG
• CFTC Data shows Asset managers added a decent clip to their shorts -53959(Last -38267), the Leveraged community reduced their own shorts to -12010(Last -20048).
• Data/Event:

Fig 1: AUD/USD spot 120min Chart

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