NEW ZEALAND: PMI Edges Higher, Remains Comfortably In Expansion Territory

• RES 3: 147.74 - High Jan 15 and bull trigger (cont)
• RES 2: 146.53 - High Aug 6 
• RES 1: 142.95 - High Apr 7
• PRICE: 140.32 @ 15:50 GMT Apr 15
• SUP 1: 139.52 - 1.0% 10-dma envelope
• 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 are extending the strong bullish reversal, rejecting any test of fresh cycle lows for the M5 contract. This defies the bearish momentum studies drawn on the longer-term chart, clearing moving-average resistance to print 142.40 at the new upper level. To the downside, sights are on 136.57, a Fibonacci projection. 144.48 is the medium-term target on any recovery.

Bloomberg reported that there was a US crude inventory build of 2.4mn barrels last week (Cushing fell 349k), while products fell again with gasoline down 3mn and distillate 3.2mn, according to people familiar with the API data. The official EIA figures are out later today but higher crude and lower products has been a common trend over recent weeks signalling that US demand remains solid.  

The NZD had a range of 0.5892 - 0.5944 overnight, Asia is dealing near the lows around 0.5900 as the USD finally found some buyers. The US dollar has finally bounced, breaking its 5 day losing streak.

• President Trump has called on China to reach out to him to calm the trade war after the country is said to have ordered its airlines to stop taking Boeing deliveries.
• New Zealand's monthly price indicators suggest inflation remains in check, Prices rose modestly in March following a dip in February and show inflation may come in below the RBNZ’s outlook. (per BBG)
• Overnight the Whole Milk Powder auction saw the average price rise to $4171/MT from $4062MT. In level terms this is almost back to the highs of 2025.
• The NZD has finally found some supply after making a high for a 5th day. It would be very unusual for this sort of price action to continue unabated, but the NZD does have a habit of not letting go when it has the market wrongly positioned.
• At this stage some consolidation might be healthy but the price action does suggest that dips will probably find demand, first support is 0.5800/30 then 0.5730/60.
• More broadly, technically the NZD held the pivotal 0.5500 area and is now looking like it is putting in a base from which to potentially move higher.
• Data : NZ March Non-resident Bond Holdings. 

Fig 1: NZD/USD Spot 

Source: MNI - Market News/Bloomberg