US TSYS: Subdued Pre-Payrolls Friday

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• In an 8-1 vote the RBA hiked rates 25bp to 4.35% as was widely expected. This was the third consecutive increase and brought rates back to where they were before 2025’s easing.
• The RBA believes that policy is now a “bit restrictive” but that tightening has given it “space” to monitor risks in both directions to growth, employment and inflation. Thus it could pause in June.
• While modestly softer than pre-RBA levels, OIS pricing continues to show tightening across all meetings, with the probability of a 25bp hike rising from 26% for June to 107% by September and 144% by December 2026.
• The May hike was driven by “indications” that higher fuel prices would likely have “second-round effects on prices for goods and services more broadly” and that the Iran War is already “adding to inflation”. 

• In their first day back post May day break, CGB's are posting losses following the withdrawal of liquidity by the PBOC and ahead of a big auction schedule.  
• China's central bank is likely to guide liquidity conditions from an "extremely loose" stance in April toward a "neutral with a mild easing bias" setting in the coming months, according to the Shanghai Securities News: https://paper.cnstock.com/html/2026-05/06/content_2212810.htm
• The CGB 10-Yr has backed up +1.5bps to 1.76% as bond futures tick lower.  
• The 10-Yr bond future is down -.09 to 108.495 and break below the 20-day EMA of 108.54.  Below is the 50-day EMA at 108.41.
• Friday sees a significant uptick in issuance with CNY85bn 2056, CNY170bn 2028 plus 1-Yr and 20-Yr auctions for unspecified amounts

Bitcoin had a range overnight of $80,520.67 - $81,768.31, Asia is currently trading around $81,500. The market has continued to trade very well with dips being strongly supported. Bitcoin is once again trading in sync with any risk-on move now and with sentiment moving higher, Crypto is benefitting. While risk continues to power ahead rightly or wrongly, I suspect dips could continue to be supported. The bulls are now challenging the $80k-$85k resistance area. I suspect we do some work around this area initially but a sustained break above here and we could see levels back toward $95k-$100k again. Reports Michael Saylor will start selling Bitcoin to pay for dividends is something new and not positive for those who believed he would never sell a single bitcoin.

• Watcher.Guru on X: “JUST IN: Michael Saylor's Strategy proposes selling some Bitcoin to pay dividends. "You buy Bitcoin with credit, you let it appreciate, and then you sell Bitcoin to pay the dividend." 
• Andy Constan on X: "Change of plan on Saylor saying he will sell BTC.  I'm out of this nonsense."
• Shanaka Anslem Perera on X: “Strategy just reported a $14.47 billion operating loss for the first quarter of 2026. Its quarterly revenue was $124.3 million. The loss was 116 times the revenue. The stock closed up 1.69% on earnings day. The $14.47 billion loss told you nothing about the company. The shift from “never sell” to “structured harvesting” told you everything.” https://x.com/shanaka86/status/2051807699856392461?s=20 
• Dave Liedtka on X: “Michael Saylor’s Bitcoin accumulation firm Strategy has survived yet another crypto market meltdown with some fresh financial engineering. bloomberg.com/news/articles/@DavidPan_1”
•  Bitcoin’s Average True Range(ATR) for the last 10 Trading days: $1,770 

Fig 1: Bitcoin spot Daily Chart

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