JPY: USD/JPY - Approaches FOMC Testing 146.00 Support Area

The NZD/USD had a range Friday night of 0.5916 - 0.5939, Asia is trading around 0.5925. US equities momentum higher seemed to stall and the USD drifted lower again into the weekend. The NZD/USD found some demand back towards 0.5900 and is consolidating just above there. While still firmly in the 0.5850-0.6150 range it's tough to discern any real direction. Risk has opened a little higher this morning, E-minis +0.10%, NQU5 +0.15%.

• RBNZ Decision(MNI) - The RBNZ meets on Wednesday August 30 and is likely to cut rates 25bp to 3.0%, the mid-point of its estimate of "neutral", after pausing at the July meeting. With measures of core inflation within the 1-3% target band, wages moderating and activity remaining subdued, the MPC is likely to determine that further easing is needed. It will also publish a revised outlook.
• (Bloomberg Economics) -- New Zealand’s monthly price indicators for July look worrying on the surface. Yet with most pressures coming from global forces and a deteriorating labor market at home, we still expect the RBNZ to cut rates — not just in August, but again in the fourth quarter and 1Q26.
• Options : Closest significant option expiries for NY cut, based on DTCC data:  none. Upcoming Close Strikes :  0.5925(NZD400m Aug 20), 0.5980(NZD660m Aug 21). - BBG
• CFTC Data shows Asset Managers have cut their longs completely and started to rebuild a short adding slightly in the NZD -3679(Last -1811), the Leveraged community though reduced their own shorts slightly -4190(Last -6778).
• Data/Event : Non resident Bond Holdings

Fig 1: NZD CFTC Data

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

The AUD/USD had a range Friday night of 0.6500-0.6523, Asia is trading around 0.6510. US Equities momentum higher seemed to stall and the USD drifted lower again into the weekend. The AUD continues to consolidate around 0.6500, firmly in the middle of its 0.6350-0.6650 range with no clear direction.

• Bloomberg - “Battery investors are piling into Australia, chasing profits from the world’s most volatile power market by developing storage that buys low and sells high.”
• “China’s economy lost momentum in July at a faster-than-expected pace, reinforcing the case for more stimulus from Beijing. Growth undershot Bloomberg Economics’ projections — already among the most conservative — across several key indicators. Most notably, consumption continued to decelerate quickly after a negative surprise in June, while investment — a key lever for fiscal stimulus — contracted from a year earlier in July, an infrequent occurrence.” - BBG
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6475(AUD541m), 0.6500(AUD424m), 0.6575(AUD395m). Upcoming Close Strikes : 0.6515(AUD744m Aug 19), 0.6600(AUD1.34b Aug 21) - BBG
• CFTC Data shows Asset managers added to their shorts -67449(Last -60729), the Leveraged community though reduced their own shorts -10121(Last -13997).

Fig 1: AUD CFTC Data

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

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