AUSTRALIA DATA: Slowdown In Capex Goods Imports, Trade Surplus Remains In Range

US treasury futures are steady Tuesday with limited follow on from the overnight sell off on inflationary fears.  The 10-Yr is up +01 at 113-03+ above all major moving averages, and back below overbought on the 14-day relative strength index. 

Cash has continued to weaken, though the pace has slowed dramatically.  

• The 2-Yr is flat at 3.477%
• The 5-Yr is flat at 3.612%
• The 10-Yr is up +0.4bps at 4.042%
• The 30-Yr is up +1.2bps at 4.694%

Typically longer bonds are most sensitive to inflation fears.  The 30-Yr is currently near to the bottom end of the 3-month range of 4.61% - 4.92%, suggesting upside risks for yields could build.  

Tuesday Calendar:  

• 03/03 -- Wards Total Vehicle Sales
• 03/03 0955 NY Fed Williams moderates discussion
• 03/03 1130 US TSY -  $90B 6W bill auction
• 03/03 1155 MN Fed Kashkari Bbg investment confernce

Source: Bloomberg Finance L.P. / MNI

The USD index is holding a little lower for the session, last near 1195. Higher beta plays are outperforming, led by AUD. The move down in the USD/CNY fixing and the strong CNY onshore open is also spilling over to AUD. AUD/USD was last near 0.7115, with recent highs at 0.7137 an upside focus point. USD/CNH is back under 6.8800, likewise for onshore USD/CNY spot. Highs in USD?CNH yesterday were at 6.9133 

• Oil prices holding higher, but still under Monday highs. Brent crude last just under $79/bbl. Equity sentiment less positive, but US cash markets outperformed in Monday trade. Eminis were last off around 0.40%.
• Some offset for the AUD also coming from higher precious metals (gold +1% to be near $5400), while remarks earlier from RBA Governor Bullock (every RBA meeting live etc) also likely helping the A$ at the margins.

The effects of the provision of liquidity over Lunar New Year is starting to decline with Repo rates declining moderately.

• The PBOC issued CNY34.3bn of 7-day reverse repo at 1.4% during this morning's operations.
• Today's maturities CNY 526bn of 7-day reverse repo
• Net liquidity withdrawal CNY491.7bn.
• 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 1.43%, from prior close of 1.46%.
• The China overnight interbank repo rate is at 1.25%, from the prior close of 1.29%.
• The China 7-day interbank repo rate is at 1.44%, from the prior close of 1.45%.