FOREX: US Equity Futures Up From Earlier Lows, Safe Haven FX Marginally Weaker

Risk traded heavily overnight with reports the EU plans to hit about $113 billion in US goods with additional levies if ongoing discussions fail to yield a satisfactory result, people familiar said(BBG). This morning's news that US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer will meet with China later this week in Switzerland has turned that around in early Asia. At the moment price action suggests AUD does well regardless of what US stocks do, which is very interesting, but probably has more to do with how disliked the USD is. The market is still short AUD though, this has been pared back significantly, at what point do they start turning long ?

• EUR/AUD - Overnight range 1.7466 - 1.7576. Asia is trading around 1.7445. A sharp move lower this morning on the news above. Sellers should remerge now back towards 1.77, with upward momentum broken the focus will turn to the support towards 1.7000.
• GBP/AUD - Overnight range 2.0571 - 2.0715. Asia is trading around 2.0535. A good break lower on Friday, a reduction in some longs potentially targets the 2.02/03 area. A bounce back towards 2.0700 saw sellers first up overnight and this area should continue to find supply.
• AUD/JPY - Overnight range 92.12 - 92.86, Asia is trading around 93.00. While the support around 91.50/92.00 holds, price is likely to move towards testing the Weekly resistance seen between 94.00/96.00 where sellers should remerge.
• AUD/NZD -  Overnight range 1.0781 - 1.0817, the cross is dealing in Asia around 1.0805. Sellers could be expected again back towards 1.0850, a move back above 1.0900 would negate the bearish trend.

Fig 1: AUD CFTC Data

Source: MNI - Market News/Bloomberg

The Australian Office of Financial Management (AOFM) will today sell. The line was last sold on 26 February 2025 for A$800mn. 

• The previous April 2037 auction saw solid demand, with the weighted average yield coming in 0.54bps through prevailing mid-yields, according to Yieldbroker, continuing the trend of firm pricing at recent ACGB auctions. Moreover, the cover ratio rose significantly to 3.6688x, up from 3.2188x at the prior auction, indicating stronger investor participation.
• Bidding at today’s auction is likely to be shaped by several key factors. The outright yield is roughly 5bps lower than at the previous auction and remains about 40bps below the November 2024 peak.
• The 3/10 yield curve is around 40bps steeper than the previous auction but sits around 20bps below its recent high.
• Investor sentiment toward longer-dated global bonds has weakened over the past week, driven by consistently stronger-than-expected US economic data, which continues to push back expectations for rate cuts.
• Notably, this bond is included in the XM futures basket, which may lend additional support to demand.
• Overall, firm pricing is still anticipated at today’s auction, given the higher yields and other favourable factors.
• Results are due at 0200 BST / 1100 AEST.

The Australian Office of Financial Management (AOFM) will today sell A$1000mn of the 3.75% 21 April 2037 bond. The line was last sold on 26 February 2025 for A$800mn. The sale drew an average yield of 4.4666%, at a high yield of 4.4675% and was covered 3.6688x. There were 41 bidders, 12 of which were successful and 4 were allocated in full.

• This week's ACGB supply is larger than the recent average weekly issuance of $1500mn, with A$300mn of the 4.75% 21 June 2054 bond sold yesterday and A$700mn of the 2.75% 21 November 2029 bond due on Friday.
• According to the Budget 2025-26 Issuance Program Update from the Australian Office of Financial Management (AOFM), total issuance of Treasury Bonds (including Green Treasury Bonds) in 2025-26 is expected to be around $150 billion. Issuance of Treasury Indexed Bonds by tender is expected to be between $2 billion and $3 billion (additional issuance by syndication may be considered).
• For 2024-25, issuance of Treasury Bonds has been revised to around $100 billion, including around $2 billion of Green Treasury Bonds. Treasury-Indexed Bond issuance will be around $3 billion.
• Results are due at 0200 BST / 1100 AEST.