ASIA FX: USD/Asia Pairs Mostly Lower As Countries Vow To Negotiate On Trade
In South East Asia FX, USD gains, following Monday tariff announcements from US President Trump, have been pared. Countries like Thailand, Indonesia and Malaysia have signaled they will continue to negotiate and aim for lower tariff levels than those announced on Monday. Also helping sentiment was remarks from US President Trump who still appeared willing to negotiate, and that the Aug 1 deadline may still be pushed out further.
- USD/THB sits back under 32.50 in latest dealings, down around 0.30% versus end Monday levels. The Thailand FinMin expressed some shock at the 36% tariff level announced by the US, but expressed confidence in lower levels ultimately being reached before the Aug 1 dealings. Recent highs in the pair rest at 32.65.
- USD/IDR sits at 16240/45, only up a touch versus end Monday levels. Rtrs noted there may have been intervention selling of USDs at the start of the session (to suppress NDF levels). The 1 month NDF is down 0.50% versus end Monday levels in the US, last near 16260/65. Intra-session highs from Monday were at 16345.
- USD/MYR is around 4.2380, also little changed for the session. Earlier highs were at 4.2470.
- USD/PHP is around 0.55% lower, last near 56.40. The Philippines haven't been in the US cross hairs around trade issues, so this may be helping with a modest outperformance trend today. Monday highs were at 56.705, very close to the 100-day EMA resistance point.
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JGB TECHS: (M5) Rallies Off Lows
- RES 3: 147.74 - High Jan 15 and bull trigger (cont)
- RES 2: 146.53 - High Aug 6
- RES 1: 141.48/142.95 - High May 2 / High Apr 7
- PRICE: 139.19 @ 15:53 GMT Jun 06
- SUP 1: 138.54 - Low May 22
- SUP 2: 136.57 - 1.382 proj of the Jan 28 - Feb 20 - Feb 26 bear leg
- SUP 3: 134.89 - 2.000 proj of the Jan 28 - Feb 20 - Feb 26 bear leg
JGBs have rallied off recent lows, however a bearish theme remains intact following the reversal that started Apr 7. A continuation lower would signal scope for an extension towards 136.57, a Fibonacci projection. On the upside, a reversal higher would instead refocus attention on 142.95, the Apr 7 high. The first important resistance to watch is 141.48, the May 2 high. A break of this level would be viewed as an early bullish signal.
US TSYS/SUPPLY: MNI UST Issuance Deep Dive: June 2025
We've just published our UST Issuance Deep Dive - Download Full Report Here
- May’s refunding round saw guidance as well as coupon sizes for the current quarter unchanged.
- The August round (Jul 28-30) could prove more compelling, reflecting both pressure at the long end of the Treasury curve as well as a shifting fiscal outlook amid tariff revenues contrasted with impending tax cuts (not to mention the likelihood of approaching the debt limit at around that time if it’s not lifted).
- Future Coupon Upsizing: We’ve seen some expectations that Treasury could lean against some of those trends in the August refunding, with potential signals if not immediate action on adjusting buybacks or even reducing issuance duration in order to reduce pressure on the long end. MNI’s current expectation is that coupon sizes will only be increased in early 2026. We will update in our next Deep Dive at end-June, with our full refunding preview coming in late July.
- Upcoming issuance: June is set to see $315B in nominal Treasury coupon sales, in addition to $23B in 10Y TIPS and $28B FRN for a total of $366B. Sales for the month start in the coming week, on Tuesday June 10 with $58B of 3Y Note, Wednesday June 11 with $39B of 10Y Note, and Thursday June 12 with $22B of 30Y Bond.
- May Auction Results: Against a backdrop of continued steepening pressure for global sovereign curves, May’s coupon auctions saw strong sales at the short-end/belly contrasted with tails at the long-end.
US FISCAL: Extraordinary Treasury Measures Tick Up As Cash Depletes
Treasury had $84B in "extraordinary measures" available to keep the government financed as of June 4 per a release Friday. That is up from $68B a week earlier though Treasury has exhausted three-quarters of the total initially available ($362B) when the debt limit impasse began in January.
- Combined with a pullback in Treasury cash ($376B), the total resources available to avert an "x-date" in the summer are down to a total $460B, the lowest since April 10 before the annual tax take accelerated.
- There will be another uptick in Treasury cash late next week/early the following week around the mid-June tax date, but this is likely to be the last major uplift before the summer at which point x-date speculation will pick up if Congress hasn't passed a debt limit increase by then.
