BONDS: NZGBS: Richer With US Tsys As Oil Price Rise Pared

• Gold beings the week after an upside surprise in the August US non-farm payrolls report forced investors to recalculate their expectations for the upcoming Federal Reserve policy meeting.
• Prior to the jobs report, Fed Governor had Waller hinted that the central bank could hold interest rates steady if inflation continued to cool. However, the blowout jobs report (162,000 jobs vs. 55,000 expected) has pushed the market to price in a 62% probability of a rate hike at the September 16 meeting.
• Gold traded heavy into the close Friday, finishing down -0.82% at US$4,429, and down -0.57% for  the week.  
• Gold starts this week, testing the 20-day EMA of $4,422 - with the 100-day EMA below at $4,366.
• With a US holiday today, gold will not have one of its usual drivers - US yields - as a guide.  However with the 10-Yr UST currently at 4.78% gold remains locked in a valuation battle for asset allocators.  
• Expect gold to trade in a tight range today.  Technical analysis suggests immediate support sitting below at US$4,319, with a major psychological floor down at US$4,175 (the yearly open zone).
• Gold has opened lower in Asia and is testing its downside resistance.  

Fig 1:  Gold Testing 20-day EMA

source: Bloomberg Finance LP / MNI

The AUD/USD had a range Friday night of 0.7175-0.7212, Asia is currently trading around 0.7200. The pair dropped on the better NFP print but very quickly recovered those losses. A dovish Waller last week has the market focusing on the upcoming CPI which could be instrumental in the decision to hike or hold at the upcoming FOMC. Without his comments last week I suspect we might have seen a stronger reaction from the broader US Dollar to the NFP print. Yet it continues to trade with a very heavy tone and the so-called “debasement trade” ploughs ahead with both Gold and Bitcoin trading strong. Another flare up in the Middle-East over the weekend but it seems the market is becoming insusceptible to this as fatigue sets in. Until the data turns. On the day, the first support remains back toward 0.7140-0.7170, below there the 0.7050 area comes back into play. I will be watching to see if the dips remain supported and how the USD fares as the focus now turns toward the CPI data later in the week. This AUD looks like it wants to test higher but I suspect the market might be reluctant to add too aggressively to risk until they see what the US CPI data holds.

• MNI US DATA: A Strong Payrolls Report All Around At First Glance Private payrolls were comfortably stronger than expected as they increased a seasonally adjusted 127k (cons 50k) after a two-month upward revision of 37k.
• “China is injecting billions into its largest banks and insurers to shore up balance sheets and sustain growth. At least eight financial institutions are seeking 360 billion yuan ($53.6 billion) in fresh capital, with the Ministry of Finance providing more than 80%, according to filings and Xinhua.” - BBG
• CFTC Data up to 01/09/2026 shows Asset managers reducing their shorts -31 802(Last -46 714). The Leveraged community slightly reduced its core longs, +50 250(Last +53 578).  
• Options : Closest significant option expiries for NY cut, based on DTCC data:  0.7150(AUD409m). Upcoming Close Strikes : 0.7065(AUD1.91b Sept 8 ), 0.7135(AUD1.07b Sept 8 ), 0.7200(AUD728m Sept 10) - BBG
• The AUD/USD Average True Range for the last 10 Trading days: 37 Points
• Data/Event: ANZ-Indeed Job Advertisements, Foreign Reserves

Fig 1: AUD CFTC Data

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

Last week's CFTC FX positioning update (for the week ending Tuesday 1 Sep) showed a sharp extension of leveraged shorts in JPY, see the table below. The -111k net short position for JPY in this space was back out to fresh wides since end July. Price action in USD/JPY was supported up until last Wednesday, with the pair probing above 160.00 before retracing sharply through the second half of last week amid fresh intervention fears, along with supportive BoJ rhetoric around the interest rate outlook. Even the firm US NFP beat from last Friday provided little net benefit for broader USD indices USD/JPY is above 156.00 currently, but eyeing a test of the 155.00 area, where a cluster of key support areas rest.

• Elsewhere in the leveraged space, positioning shifts weren't dramatic, with EUR shorts trimmed a touch, while GBP longs were pared, likewise for AUD.
• NZD/USD shorts were cut back to levels last seen in mid June, for leveraged contracts.
• On the asset manager side, JPY, EUR and GBP shifts were all negligible. AUD shorts were cut back noticeably. We are now back to around mid June levels in terms of shorts.
• CAD saw net buying in the leveraged and asset manager space, but large outright shorts persist in both segments. 

Table 1:  CFTC Weekly Change & Outright FX Positioning By Major Currency (Sep 1 2026) 

Source: CFTC/Bloomberg Finance L.P./MNI