BONDS: NZGBS: Richer With US Tsys, Empty Calendar Apart From Weekly Supply

1 month USD/KRW spent most of the post Asia close on the front foot. We ended the NY session near 1334.7, a won loss of 0.45%, which was the 5th straight decline. The won underperformed BBDXY gains, which were a more modest 0.18% for Monday's session. Note onshore spot ended at 1333.7 yesterday.

• The 1 month USD/KRW NDF stopped short of reaching fresh highs for March, albeit just. These highs come in just above 1335. Beyond that lies the Feb 13 high of 1341.79. Moves above 1340 have had no follow through this year, with official rhetoric around FX weakness also stepping up on some of these prior breaks.
• Focus could return to this region given the tendency for negative seasonality for the won in April amid dividend outflow pressures (Spot KRW has lost on average 1.05% in the last 5 April's).
• In the cross asset space on Monday, we had mixed tech related equity trends, the SOX flat, but the MSCI IT rose 0.61%. Broader equity sentiment was positive in US markets, but didn't aid the won a great deal. Firmer US yields, including fresh YTD highs for some parts of the curve, supported broader USD sentiment.
• Onshore equities closed higher yesterday (Kospi + 0.71%), while offshore investors added $77.4mn to local shares.
• The data calendar is quiet today. The authorities are taking additional steps to curb food inflation (see this BBG link).

• RES 3: 97.380 - High Mar 21 and a major resistance (cont)
• RES 2: 97.190 - High May 5 (cont)
• RES 1: 96.540/670 - High Feb 2 / High Jun 2 (cont)
• PRICE: 96.300 @ 16:40 GMT Mar 18
• SUP 1: 96.110 - Low Feb 14
• SUP 2: 95.750/480 - Low Nov 27 / Low Oct 31
• SUP 3: 95.300 - 3.00 proj of the Mar 21 - May 2 - May 5 price swing

Aussie 3yr futures trend conditions remain bullish, despite further weakness into the Thursday close. An extension of the current bull cycle would pave the way for a climb towards the Feb 2 high of 96.540 where a break would open 96.670, the Jun 2 2023 high. The Jan 18 - 22 low at 96.120 has recently been pierced, however, short-term weakness is considered corrective above 95.750, the Nov 27 low.

USD/CNH got to fresh highs near 7.2090 in US trade on Monday, before easing modestly into the close. We track near 7.2065 in early Tuesday dealings. Dips in the pair to the 7.2020/25 region were supported in Monday trade. Onshore USD/CNY spot finished up at 7.1984, so just shy of the 7.2000 resistance point. The CNY NEER (J.P. Morgan Index) rose further to 124.33 (+0.11%), as the yuan continued to outperform the firmer USD backdrop.

• USD/CNH still looks too low relative to US-CH yield differentials, which continue to track higher, with the 2yr and 10yr spreads back to mid Nov levels form last year. US yields generally remain on the front foot as the FOMC comes into focus.
• In US trade, the Golden Dragon index fell a further 0.63%, its third straight session of losses. Still, mainland shares continued to rise yesterday, both the CSI 300 and Shanghai Composite up close to 1%. Yesterday's better IP/FAI data, likely helping at the margins.
• Northbound stock connect flows continue as well, lending some support to the yuan, although the China equities are not dramatically outperforming the rest of the world trend. Last month also saw offshore investors sell local bonds for the first time since September last year (see this BBG link).
• Elsewhere, the EU is considering a review of risks around China legacy computer chips, similar to what the US has done (see this link).
• The local data calendar is empty until tomorrow's 5yr and 1yr LPR decisions, no change is forecast though.