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TYM5 is dealing at 110-04, +0-05 from closing levels in today's Asia-Pac session. 

• According to MNI’s technicals team, Treasury futures maintain a softer tone following recent weakness. Support at 110-01+, a Fibonacci retracement point, has been broken. Clearance here strengthens a bearish theme and exposes a key support at 109-08, the Apr 24 low. Key near-term resistance has been defined at 111-22, the May 7 high. A break of this level is required to signal a potential reversal.
• There has been no net movement in cash US tsys in today's Asia-Pac session after being little changed yesterday following the tame April CPI report.
• The 10-year yield range seems to be 4.10% - 4.50%, with the yield currently testing the upper bound of this range. A sustained break above this level would see another round of selling targeting the 4.75% area.
• Data: US MBA Mortgage Applications

RBNZ-dated OIS pricing is flat to 3bps firmer across meetings today, leaving rates 2–14bps above levels seen prior to the Q1 CPI release on April 17.

• Q1 New Zealand CPI came in hotter than expected at 0.9% q/q, lifting the annual rate to 2.5% from 2.2% in Q4. Both tradeables and non-tradeables components contributed to the upside surprise.
• However, the RBNZ’s preferred measure of underlying inflation—the sectoral factor model—edged lower to 2.9% in Q1, down from a downwardly revised 3.0% in Q4. This marks the lowest print since Q2 2021 and places core inflation just under the top of the RBNZ’s 1–3% target band.
• In Australia, Q1 headline and underlying CPI exceeded expectations by 0.1pp, although the trimmed mean slowed to 2.9% y/y, falling within the RBA’s target band for the first time since Q4 2021.
• For comparison, RBA-dated OIS pricing is now 4–40bps firmer than pre-Q1 CPI levels recorded on April 30.

Figure 1: RBNZ Dated OIS Current vs. Pre-CPI Levels (%)

Source: MNI - Market News / Bloomberg

• China's bond futures are all lower in morning trading.  
• The 10YR future is lower by -0.10 at 108.56 and has breached the 50-day EMA of 108.59.  The next key level below is the 100-day EMA of 108.32.
• The 2YR future is lower by -0.05 at 102.46 and remains firmly below all major moving averages.  The nearest being the 20-day EMA at 102.46.
• CGB bond yields are stable with the CGB 10YR at 1.66%