SGD: USD/SGD - Probing Pivotal 1.2900 Support

AU–NZ 1-year forward 3-month swap (1Y3M) spread at 103bps is now at its highest level since 2012. 

• The 1Y3M differential is a proxy for the expected relative policy path over the next 12 months.

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USD/CNH once again couldn't sustain sub 7.1200 levels, despite a softer USD backdrop as Tuesday trade unfolded (we were last 7.1220/25). The BBDXY index and DXY indices lost around 0.10%, as softer jobs data from the new weekly ADP release weighed. CNH was close to unchanged for Tuesday's session, while the broader technical backdrop remains the same. Expect moves up into the 7.1300/1400 region to draw selling interest, while downside targets are likely to focus on 7.1000 from a medium term standpoint. 

• Spot USD/CNY finished up at 7.1173, while the CNY CFETS basket tracker edged down a little further to 97.87, consistent with softer USD index levels.
• The CNH/JPY cross was relatively steady, we track near 21.6470 in early Wednesday trade, with USD/JPY unable to test above 154.50 as softer US data weighed. This leaves recent highs in CNH/JPY intact, just above 21.70.
• For USD/CNH, downside risks will still likely emerge as the bias around US-CH 2yr yield differentials is still skewed lower over the medium term.
• The PBoC did state late yesterday, it will implement a moderately loose monetary policy, utilise various tools to maintain relatively loose social financing conditions, according to the Q3 monetary report released Tuesday. On FX, the report said it will maintain exchange rate flexibility, strengthen expectation guidance, prevent the risk of overshooting, and keep the yuan basically stable at a reasonable and balanced level. This is no change in the FX stance.
• On the data front, we still await Oct new loans and aggregate financing data. The PBoC also stated that slowing loan growth is not cause for concern as the economy shifts from high speed to high quality growth. 

NZGBs are flat to 2bps richer, with the 5-year benchmark leading.

• US tsy futures holding firmer. Currently, the Dec'25 10Y contract finished trading +10 at 113-00 vs. 113-01.5 high - just below resistance at 113-02, the Nov 5 and 7 high. Clearance of this level would highlight a potential bullish reversal – MNI Tech
• Otherwise, a short-term bear theme in US tsy futures remains in place. Attention is on a reversal trigger at 112-06, the Sep 25 low, and the 100-DMA, at 112-08. A clear break of these price points would expose a trendline support at 112-02.
• Bloomberg reports that, "First-Time Buyers Snap Up New Zealand Property After Price Slide. People signing up to buy their first property in New Zealand made up a record 27.7% of all transactions in the third quarter, according to the Cotality-Westpac NZ First Home Buyer Report."
• Swap rates are 2bps lower.
• RBNZ dated OIS pricing is little changed across meetings. 28bps of easing is priced for November, with a cumulative 38bps by February 2026.
• Today, the local calendar will be empty ahead of Card Spending data tomorrow.
• On Thursday, the NZ Treasury plans to sell NZ$250mn of the 4.50% May-30 bond, NZ$150mn of the 4.25% May-34 bond and NZ$50mn of the 5.00% May-54 bond.