OIL: US Crude Stocks Build While Products Keep Falling

TYM5 is 111-14+, +0-08 from closing levels in today's Asia-Pac session. 

• According to MNI’s technicals team, Jun'25 10Y futures have breached initial technical resistance at 110-26 (Mar 25 high). The medium-term trend condition is bullish, the first key resistance is located at 111-17+, the Mar 20 high.
• A strong risk-off tone gathered momentum going into the weekend ahead of this week's Trump Tariff "Liberation Day" rollout on April 2, not to mention Friday's employment data for March. Friday morning's drop in Consumer Sentiment and rising inflation expectations, as reported by the University of Michigan, added to concerns.
• The S&P closed 2% lower while US tsy yields dropped sharply across the curve. The US 10-year yield closed 11bps lower at 4.25%, having threatened to break out through the top side of the trading range, the previous day.
• “US Treasuries have outperformed stocks this quarter, heading for a more than 2% gain, while the equity benchmark S&P 500 fell about 5%. It marks the first time since the onset of the pandemic in March 2020 that stocks fell, and bonds rose in a three-month period.” (per BBG)

NZD/USD tracks near 0.5700 in early Monday dealings, down from end Friday levels in US trade. The Kiwi was the worst performer through Friday's session in the G10 space, losing just over 0.40% (with AUD down 0.29% and the second worst performer. Broader USD trends were mixed through with JPY outperforming, following by EUR, amid risk off in the equity space. 

• Current levels for NZD are just under recent lows for the pair. We are just under the 50-day EMA (near 0.5720). A clean break sub 0.5700 could see lower March levels targeted. At the beginning of the month we tested sub 0.5600. On the topside, a recent cap has been the 100-day EMA at 0.5760.
• US equity markets were weaker across the board on Friday, the SPX down nearly 2%. US data showed rising consumer inflation expectations but softer sentiment. US yields were lower across the board, the US 10yr down 11bps to 4.25%.
• This aided yen outperformance, with NZD/JPY down 1.2% for Friday's session. The pair tracks lower in early Monday trade, last near 85.30, back under all key EMAs. The early tone for equity futures in the US is weaker, with jitters ahead of 'Liberation Day' tariffs remaining in focus.
• Locally, the RBNZ will conduct a review into bank capital requirements. (see this link).
• On the data calendar today we have the March ANZ activity and business confidence prints. 

In local morning trade, NZGBs are sharply richer after a strong risk-off tone gathered momentum going into the weekend ahead of this week's Trump Tariff "Liberation Day" rollout on April 2, not to mention Friday's employment data for March.

• Friday morning's drop in Consumer Sentiment and rising inflation expectations, as reported by the University of Michigan, added to concerns.
• The S&P closed 2% lower while US tsy yields dropped sharply across the curve. The US 10-year yield closed 11bps lower at 4.25%, having threatened to break out through the top side of the trading range, the previous day.
• While curves have scaled off steepest levels since early Jan'22 (short-end lagging), projected rate cuts through mid-2025 gained significantly on Friday vs. previous levels (*) as follows: May'25 at -5.2bp (-3.9bp), Jun'25 at -21.8bp (-17.2bp), Jul'25 at -36.5bp (-28.5bp), Sep'25 -52bp (-43.5bp).
• Swap rates are 4-7bps lower, with the 2s10s curve flatter.
• RBNZ dated OIS pricing is slightly softer across meetings. 24bps of easing is priced for April, with a cumulative 698bps by November 2025.
• Today, the local calendar will see ANZ Business Confidence later.