COMMODITIES: Oil and Gold Post Modest Falls

• RES 3: 147.74 - High Jan 15 and bull trigger (cont)
• RES 2: 146.53 - High Aug 6 
• RES 1: 141.48/142.95 - High May 2 / High Apr 7
• PRICE: 139.08 @ 16:23 GMT Jun 13
• SUP 1: 138.54 - Low May 22
• SUP 2: 136.57 - 1.382 proj of the Jan 28 - Feb 20 - Feb 26 bear leg   
• SUP 3: 134.89 - 2.000 proj of the Jan 28 - Feb 20 - Feb 26 bear leg

JGBs hold above recent lows, however a bearish theme remains intact following the reversal that started Apr 7. 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 knee jerk reaction in major asset classes has been risk off (ex weaker yen) as Monday trading resumed, with a focus on spill over from oil prices. We are away from earlier extremes though. 

•  For the oil benchmarks we sit off session highs. WTI got to $77.49/bbl (just short of Friday highs) but is now back under $75/bbl. Brent rose to $78.32/bbl at the open, but is now back around $75.85/bbl. Both benchmarks are still up over 2%, as Israel started targeting Iran energy facilities.
• Headlines have crossed from US President Trump, stating he continues to support Israel, noting: "TRUMP SAYS HE HOPES THERE WILL BE A DEAL BETWEEN IRAN AND ISRAEL, BUT SOMETIMES YOU HAVE TO FIGHT IT OUT - [RTRS]"
• US equity futures fell at the open but are back close to flat now (Eminis near 6027). The USD is firmer, mostly against the yen, with USD/JPY up to 144.60, +0.35% on end Friday levels. EUR and GBP are down a touch, while AUD and NZD are little changed.
• Gold couldn't sustain +$3450/oz levels earlier, but is still +0.25% versus end Friday levels. US Tsy futures are little changed. 

The NZD had a range Friday night of 0.5995 - 0.6042, Asia is trading around 0.6015. The NZD continues to hold above its support around the 0.6000 area. The USD tried to bounce as a safe haven on Friday but really struggled to hold onto its gains falling away into the close once again.

• "NZ MAY SERVICES PSI FALLS TO 44: BNZ", (prior 48.1).
• Bloomberg - “Chinese passport holders traveling from Australia, with valid Australian work, student or family visas, will be able to visit New Zealand visa-free from November. The government is seeking to boost Chinese tourist numbers.”
• The USD’s muted reaction to the events on Friday have the market again questioning the role it has as a safe haven ?
• The NZD continues to find solid support around the 0.6000 area. The upward momentum though has stalled for now and the market will be watching if risk can continue to hold up as it did impressively on Friday night. 
• While the support around 0.5850 holds in NZD/USD there should be buyers around on dips. A clear break above 0.6050/0.6100 and the move could start to accelerate. 

• CFTC Data showed Asset managers paring back their shorts slightly over the week, the leverage community did likewise.

  Fig 1: NZD/USD Spot Daily Chart

  

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