AUSSIE BONDS: Richer & Near Bests, Tariff HLs In Focus, Q1 GDP Wednesday
ACGBs (YM +9.0 & XM +10.0) are hovering near Sydney session highs.
- Cash US tsys are slightly mixed, with a flattening bias, in today's Asia-Pac session.
- Bloomberg - “President Trump just sent out a long social media post making it clear his commitment to tariffs is as strong as ever following a court ruling that deemed the levies were illegal. That underscores that efforts to contest the measures via the courts may do more to boost uncertainty than to ameliorate the impact of the imposts, adding to pressure on the US dollar and equities.”
- Cash ACGBs are 9bps richer, with the AU-US 10-year yield differential at -14bps.
- The bills strip has bull-flattened, with pricing +2 to +10.
- RBA-dated OIS pricing is 3-10bps softer across meetings today, with early 2026 leading. A 25bp rate cut in July is given a 69% probability, with a cumulative 76bps of easing priced by year-end.
- On Monday, the local calendar will see Cotality Home Value, S&P Global PMI Mfg, MI Inflation and Job Advertisements data. Q1 GDP prints on Wednesday, with market consensus at +0.4% q/q 1.5% y/y.
- Next week, the AOFM plans to sell A$1200mn of the 3.75% 21 April 2037 bond on Tuesday and A$800mn of the 1.50% 21 June 2031 bond on Friday.
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EURUSD TECHS: Corrective Cycle
- RES 4: 1.1696 1.618 proj of the Feb 28 - Mar 18 - 27 price swing
- RES 3: 1.1625 1.500 proj of the Feb 28 - Mar 18 - 27 price swing
- RES 2: 1.1608 High Nov 9 2021
- RES 1: 1.1440/1573 High Apr 23 / 21 and the bull trigger
- PRICE: 1.1373 @ 06:01 BST Apr 30
- SUP 1: 1.1308 Low Apr 23
- SUP 2: 1.1251 20-day EMA and a key support
- SUP 3: 1.1144/1002 High Apr 3 / 50-day EMA and a pivot level
- SUP 4: 1.0805 Low Apr 3
The recent pullback in EURUSD is considered corrective and the trend structure is unchanged, it remains bullish. MA studies are in a bull-mode position signalling a dominant uptrend, and the latest move down is allowing an overbought condition to unwind. A resumption of gains would open 1.1608 next, the Nov 9 2021 high. Key support is at the 20-day EMA, at 1.1251. A break of this average would signal scope for a deeper corrective pullback.
BONDS: NZGBS: Closed Richer, Bus Conf Lower, US ADP Data Later
NZGBs closed 1-3bps richer, but slightly off session bests at the long-end.
- NZ-US and NZ-AU 10-year yield differentials closed little changed.
- Cash US tsys are slightly mixed in today's Asia-Pac session.
- ANZ business confidence fell to 49.3 in April from 57.5, the lowest level since July 2024, the month before the start of the RBNZ’s easing cycle. The activity outlook moderated to 47.7 from 48.6, which remains above February’s 45.1.
- On a more positive note, the assessment of activity compared to a year ago rose 10 points to 11 driven by services and signalling a strong start to Q2 for GDP growth. Price/cost components trended higher over Q1 but were mixed in April but inflation expectations were stable around 2.6%.
- Online job ads fell for the 10th straight quarter on an annual basis.
- Swap rates closed 2-5bps lower, with the 2s10s curve flatter.
- RBNZ dated OIS pricing closed little changed across meetings. 26bps of easing is priced for May, with a cumulative 83bps by November 2025.
- Tomorrow, the local calendar will see CoreLogic Home Values ahead of Building Permits on Friday.
- Tomorrow, the NZ Treasury plans to sell NZ$250mn of the 4.50% May-30 bond, NZ$150mn of the 4.25% May-34 bond and NZ$50mn of the 5.00% May-54 bond.
BUND TECHS: (M5) Trend Needle Points North
- RES 4: 133.90 1.236 proj of the Mar 25 - Apr 7- 9 price swing
- RES 3: 133.00 round number resistance
- RES 2: 132.56 High Feb 28 and a key resistance
- RES 1: 132.03 High Apr 7 and the bull trigger
- PRICE: 131.47 @ 05:35 BST Apr 30
- SUP 1: 130.77/129.92 20-day EMA / Low Apr 11
- SUP 2: 129.02 Low Apr 10
- SUP 3: 128.60 Low Apr 9 and a key support
- SUP 4: 128.47 Low Mar 28
Bund futures continue to trade below their recent highs. Despite the latest move down, a bull cycle remains in play and the sell-off between Apr 7 - 9 is considered corrective. Attention is on resistance at 132.03, the Apr 7 high and a bull trigger. Clearance of this level would confirm a resumption of the uptrend and open 132.56, the Feb 28 high. Firm support lies at 128.60, the Apr 9 low. A break of this level would alter the picture.
