AUD: Reaction To Unemployment

This morning's post by President Trump that everyone should evacuate Tehran immediately has seen stocks open soft in our session, if something significant is not seen the danger is this move will also just be reversed. ESU5 -0.40%, NQU5 -0.45%. The AUD has drifted lower back towards 0.6500 on this reaction -0.15%.

• EUR/AUD - Overnight range 1.7690 - 1.7802, Asia is currently trading around 1.7740. The pair is drifting back towards the support around the 1.76/77 area and while this holds the markets focus will be on testing the 1.8000 area again.
• GBP/AUD - Overnight  range 2.0775 - 2.0897, Asia is trading around 2.0830. This pair is back in its 2.0500-2.1050 range. A break above 2.1050 is needed to see the move higher once more gain momentum. If the AUD/USD does start to break higher this could see this air drift back to the 2.0500 area.
• AUD/JPY - Overnight  range 93.56 - 94.55, Asia is trading around 94.40. Choppy price action as the pair establishes a range between 92.00 - 96.00. A break back below 91.50/92.00 is needed to see the move lower regain momentum and the focus turn back to the year's lows again.

• AUD/NZD -  Overnight  range 1.0761 - 1.0795, the cross is dealing in Asia around 1.0760. A top looks in place now just above 1.0900, the cross topped out last week towards the 1.0800/25 sell area, the first target looks to be around 1.0650.

  Fig 1: GBP/AUD spot Hourly Chart

  

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

• The PBOC issued CNY197.3bn of 7-day reverse repo at 1.4% during this morning's operations.
• Today's maturities CNY198.6 bn
• Net liquidity withdrawal CNY1.3 bn.
• The PBOC monitors and maintains liquidity in the interbank system through the issuance of reverse repo.
• The CFETS Pledged Repo Deposit Institutions 7 Day Weighted is at 1.41%, from prior close of 1.52%.
• The China overnight interbank repo rate is at 1.38%, from the prior close of 1.38%.
• The China 7-day interbank repo rate is at 1.41%, from the prior close of 1.55%.

Today’s auction result extended the recent trend of firm pricing for ACGBs, with the weighted average yield printing 0.31bps through prevailing mids, according to Yieldbroker. Moreover, demand improved, as reflected by a cover ratio of 2.8433x, up from 2.4833x at the previous auction.

• The bond’s outright yield was broadly unchanged from the previous auction, though it remained around 20bps below the peak reached in May.
• The 10s/30s yield curve was slightly steeper than at the last auction, and sat at its steepest level since late 2021 — a potentially supportive technical factor.
• Sentiment toward longer-dated global bonds remains cautious, which may have tempered demand.
• In the wake of the auction, the ACGB Jun-54 has traded slightly richer in the secondary market.