FOREX: USD - Looking To Challenge The 1205-1208 Resistance In The BBDXY

• Gold is up Tuesday as US yields continue to subside on Federal Reserve comments that eased rate-hike bets and a report suggesting that US President Donald Trump is willing to end the Iran war without reopening the Strait of Hormuz.
• Gold has consolidated back above $4,500 with a +1.1% gain during the Asian trading day.  
• Currently near US$4,561 / 4562, gold remains between the 100-day EMA of $4,621 and the 200-day EMA of $4,238.

• BBG reports that the ongoing outflows from Gold ETFs sees a monthly decline of near 3%, the largest in over 3 years.  The report shows that gold historically goes onto deliver credible gains in the months thereafter.  

  

NZGB yields have tracked lower through Tuesday trade. Benchmarks are down around 5-6bps, with fairly uniform moves across the curve. This follows the sharp move lower in UST yields on Monday, which has continued today, with a further 2-2.5bps in yield losses. Sentiment has been impacted by a WSJ story in which Trump has reportedly told his advisors that the US can exit the war with Iran without re-opening the Strait Of Hormuz. Risk appetite is better, although mostly in the US equity futures space, oil benchmarks are around flat for the session, while the USD is close to unchanged in index terms. 

• For the NZGB 2yr we are now close to 20bps off recent March highs (last near 3.53%). We are still above all key EMAs but given we started March closer to 3.10% some consolidation is arguably not surprising. The 10yr is back near 4.70%, off around 16bps from recent highs.
• On the data front, ANZ's business survey showed a deterioration in business confidence, activity and outlook in March while inflation indicators were uniformly higher. Business confidence fell to 32.5 from 59.2, lowest since July 2024, while the activity outlook was down to 39.3 from 52.6, softest since August. The uncertainty around the implications of the Iran War and the duration of elevated fuel prices have weighed on the economy at a time of a nascent recovery, which is likely to add to the MPC's sentiment to stay on hold.
• Market pricing for the RBNZ has softened a little, now under 3.00% (last near 2.95%).
• Tomorrow on the data front we have Feb building permits, then home values later on. 

• China's 10-Yr bond future is up strongly Tuesday, pushing further above all major moving averages.  
• Up +.06 today at 108.41 sees the short term momentum indicator MACD in a bullish cross - (the MACD (white) line has crossed above the Signal (red) line).  
• Equities continue to misfire, likely driving the demand for bonds as cash finally gets moving with the 10-Yr now back at 1.80% with some domestic commentary describing the war in Iran as a growth killer.
• The PBOC is expected to continue its CGB buying program (averaging CNY150–200 bn monthly) to coordinate with the massive fiscal bond issuance. This implicit QE prevents yields from spiking too far, even as the government borrows more.  Judging by the moves in the long end (30-Yr at 2.32% versus recent high of 2.39%) it appears that the PBOC purchases are focused on longer CGBs as this is where the supply is expected to come also.