OIL: Potential Trade War Weighing On Crude

In local morning trade, NZGBs are flat to 3bps cheaper after a heavy NY session for US tsys. Benchmark yields finished 3-7bps higher, with the 7-year leading.

• Meanwhile, projected US rate cuts into early 2025 were steady to slightly lower vs. yesterday’s open (*) as follows: Jan'25 steady at -2.1bp, Mar'25 -11.7bp (-13.7bp), May'25 -16.0bp (-18.8bp), Jun'25 -23.4bp (-25.3bp).
• There was little reaction to a flurry of mixed data: November posted improved home sales figures compared with a soft October but revised New home sales came in roughly as expected at 664k on a seasonally adjusted annualized rate, up from 627k prior (upwardly revised from 610k). This follows data showing a 4.8% M/M increase in existing home sales in November to the highest level since March at 4.15M.
• The headline durable goods orders figure of -1.1% M/M, the "miss" vs. -0.3% expected, was offset by an upward revision to the prior growth reading to 0.8% from 0.3%.
• Swap rates are 3bps higher.
• RBNZ-dated OIS pricing shows 54bps of easing for February, with a cumulative 123bps by November 2025.
• Today, the local calendar is empty, with an early close ahead of the Christmas break.

• Bank Indonesia to Sell 87D SVBI Bills
• Bank Indonesia to Sell 31D SVBI Bills
• Bank Indonesia to Sell 182D SVBI Bills
• Bank of Thailand to Sell THB55 bn of 91-Days Bills.
• MAS to Sell S$23 Billion 83-Day Bills
• MAS to Sell S$15.9 Billion 28-Day Bills
• Hong Kong to Sell HK$19.8 Billion 180-Day Bills
• Hong Kong to Sell HK$62.749 Billion 89-Day Bills
• China Plans to Sell 1 Year Bonds
• China Plans to Sell 7 Year Bonds
• China to Sell 40 Billion Yuan 2031 Bonds
• China to Sell 90 Billion Yuan 2025 Bonds
• China to Sell 20 Billion Yuan 28-Day Bills
• China to Sell 40 Billion Yuan 91-Day Bills
• South Korea to Sell 100 Billion Won 20-Year Bonds

The USD was mostly on the front foot post the Asia close on Monday, albeit in lighter liquidity conditions as markets start to wind down ahead of the Christmas/NY period. The BBDXY climbed 0.30%, to push back above 1300, while the DXY gained nearly 0.45%. For the BBDXY index we are still short of recent cycle highs at 1305.5. 

• Safe havens underperformed in Monday trade, JPY losing 0.50%, while CHF lost 0.60%. US yields were higher across the curve, with the 10yr back close to 4.59% (up over 6bps). The move appeared independent of data outcomes and debt sales.
• It did help USD sentiment, while equity sentiment was positive in US markets as well. The SPX rising up over 0.70%.
• USD/JPY got to highs of 157.27, but tracks slightly lower in early Tuesday dealings, last near 157.10/15. Recent highs at 157.93 remain intact. USD/CHF was last around 0.8985.
• GBP/USD is back to 1.2535 (off 0.30%), with softer GDP revisions from Monday weighing. EUR/USD is close to 1.0405/10.
• AUD and NZD outperformed on a relative basis for Monday's session. AUD/USD was supported at around 0.6220, last near 0.6250, while NZD/USD was near 0.5650 in latest dealings.
• Today we have the BoJ Minutes from the Oct policy meeting. The RBA minutes from the Dec meeting are also due.