OIL: Shipped Seized off the Coast of Venezuela Allegedly Identified as Skipper

NZGBs are little changed despite US tsys finishing Monday’s session with a modest bear-flattener, with yields 1-3bps higher. 

• Optimism buoyed as the US Govt shutdown appears to be nearer an end after eight Democrats broke formation with colleagues to reopen the Govt.
• Stocks rallied, led by chip makers while Health Care sector shares continued to decline in the second half - if the US Govt shutdown ends without an extension of Affordable Care Act (ACA) subsidies.
• No economic data on Monday, Tuesday limited to NFIB Small Business Optimism at 0600ET. Markets open for Veterans Day "holiday" - may weigh on volumes Tuesday.
• NZ-AU 10-year differential is 2bps wider at +28bps but near its lowest since 2020. (see chart)
• Swap rates are 1bp lower.
• RBNZ dated OIS pricing is little changed across meetings. 28bps of easing is priced for November, with a cumulative 37bps by February 2026.
• Today, the local calendar will see the RBNZ's Inflation Expectations data.
• On Thursday, 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.

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Oil prices were boosted by stronger risk appetite on Monday following news that some Democrats will support the bill to reopen the US government. The focus of the week will be on supply/demand information though – US inventory data and IEA/OPEC/EIA monthly reports.

• WTI rose 0.5% to $60.05/bbl but is still down 1.4% in November. It reached $60.48 before declining to $59.41 but moves below $60 were difficult to hold. Initial support is at $58.83, 6 November low, and resistance at $62.59, 24 October high.
• Brent was 0.7% higher at $64.07/bbl off the intraday low of $63.32. It made a high of $64.34 earlier. Technicals suggest that the benchmark is in a corrective cycle for now with initial resistance at $65.98 and support at $62.84.
• The US imposed an additional 25% punitive tariff on India for its Russian oil purchases. US President Trump said that a US-India trade deal is close which would reduce the average tariff rate. However, Russia’s Interfax reported that India continues to buy Russian crude despite Trump commending them for reducing purchases.
• Countries are finding ways around the sanctions on Russia’s Lukoil and Rosneft with the former’s West Qurna 2 field in Iraq being transferred to state firms to ensure production continues, according to Bloomberg.
• The market will monitor monthly reports closely this week for any deterioration in the excess supply situation. The IEA increased its 2026 surplus forecast in its October monthly report. It publishes updates on 13 November, while its annual outlook, EIA short-term energy outlook & OPEC report are out 12 November.

The overnight range was 153.89 - 154.25, Asia is currently trading around 154.10. The pair has consolidated its recent gains above the 154.00 area. USD/JPY found solid demand around the 153.00 area on Friday again and this return of positive sentiment has brought the focus back to the 154-155 resistance area. A sustained break above here is needed to potentially see the uptrend regain upward momentum, through here the focus would then turn toward the 160 area where I would start to become wary of intervention risks.

• MNI INTERVIEW: BOJ Dec Hike Needed To Support Yen - Sakurai. The Bank of Japan should raise its policy rate 25 basis points to 0.75% at the Dec 18-19 meeting, as delaying a move would undermine its independence and risk further yen depreciation amid pressure from U.S. funds, former board member Makoto Sakurai told MNI. Markets have priced in a 49.8% chance of a hike next month. 
• Sakurai, who maintains close contact with BOJ officials since leaving the board in 2021, said Takaichi’s dovishness also weighed on the bank's decisions. “The BOJ might have raised the rate in October if the prime minister wasn’t Takaichi,” he said, adding that concern over government reaction likely contributed to the bank’s decision to stay on hold last month.
• Options : Close significant option expiries for NY cut, based on DTCC data: none. Upcoming Close Strikes : none - BBG.
• Data/Event : BoP Current Account Balance, Eco Watchers Survey Current  

Fig 1 : USD/JPY Spot Daily Chart

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