JGB TECHS: (U5) Bear Threat Still Present

• South Korea to Sell KRW1.25tn 2-Year Bonds
• Bank of Korea to Sell KRW700bn 91-Day Bonds
• South Korea to Sell KRW1.25tn 2-Year Bonds
• Philippines To Sell PHP 8.5Bln 182D Bills (PH0000059909)
• Philippines To Sell PHP 7.0Bln 91D Bills (PH0000059529)
• Philippines To Sell PHP 9.5Bln 364D Bills (PH0000060915)

The NZD/USD had a range Friday night of 0.5857 - 0.5929, Asia is trading around 0.5915. US Yields collapsed in response to the NFP data which sparked a kneejerk response lower in the USD. This was also a very bad day for US stocks which finally look to be pulling back from elevated levels. The question for the NZD going forward is does the USD see sellers quickly return in response to the move in rates, or can the USD rise from the ashes and return as a safe haven. NZD/USD bounced nicely off its 0.5850 support but would suspect sellers to return back toward 0.6000 as the market decides how best to trade the USD.

• (Bloomberg) -- Smaller economies including New Zealand, Costa Rica and Bolivia saw US import tariffs rise to 15% — up from the 10% baseline released on April 2 — as part of a sweeping effort to penalize countries running trade surpluses with the US.
• “We will be making the case about why this shouldn’t have happened and engaging very, very quickly with US officials to clarify this and to seek changes,” New Zealand Trade Minister Todd McClay told Radio New Zealand on Friday in Wellington. 
• The surplus is “really not significant or meaningful,” McClay added. “We have made the case and we’ll make it again that actually the trade is very well balanced.”
• Options : Closest significant option expiries for NY cut, based on DTCC data: none. Upcoming Close Strikes : 0.5970(NZD3496m Aug 7). - BBG
• CFTC Data shows Asset Managers again reduced their newly built longs in NZD +3903(Last +5034), the Leveraged community did the same reducing their shorts slightly -6250(Last -7328).
• Data/Event : 

Fig 1: NZD/USD Spot 120min Chart

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

The AUD/USD had a range Friday night of 0.6419-0.6493, Asia is trading around 0.6465. US Yields collapsed in response to the NFP data which sparked a kneejerk response lower in the USD. This was also a very bad day for US stocks which finally look to be pulling back from elevated levels. The question for the AUD going forward is does the USD see sellers quickly return in response to the move in rates, or can the USD rise from the ashes and return as a safe haven? The AUD bounced nicely off the 0.6400 area but I suspect sellers again back towards the 0.6500/50 area initially as risk wobbles and the market wrestles about what to do with the USD.

• (Bloomberg) - “ Australia’s Victoria state intends to overhaul workplace laws to enshrine hybrid working rights, irking business groups who anticipate the move will undermine confidence.”
• “China’s July trade figures will offer insight into the resilience of its export sector as it navigates tariff headwinds and cooling global demand. We expect exports to remain solid, with port data pointing to steady growth as strength in non-US markets helps offset a decline in shipments to the US.” - BBG
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6465(AUD727m), 0.6450(AUD402m). Upcoming Close Strikes : 0.6600(AUD1.97b Aug 7), 0.6800(AUD1.72b Aug 7) - BBG
• CFTC Data shows Asset managers reduced their shorts slightly -49183(Last -53959), the Leveraged community added to their own shorts -13997(Last -12010).
• Data/Event: Melbourne Institute Inflation

Fig 1: AUD/USD spot 120min Chart

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