NEW ZEALAND: VIEW: ASB Sees All Meetings “Live” But July RBNZ Hold Likely

The Australian Office of Financial Management (AOFM) will today sell A$300mn of the 4.75% 21 June 2054 Treasury Bond. The line was last sold on 24 March 2025 for A$300mn. The sale drew an average yield of 4.9874%, at a high yield of 4.9874% and was covered 2.7067x. There were 58 bidders, 30 of which were successful and 21 were allocated in full. The amount allotted at the highest yield as a percentage of the bid at that yield was 48.0%.

• This week's ACGB supply is larger than the recent average weekly issuance of $1500mn, with A$1000mn of the 3.75% 21 April 2037 bond also due on Wednesday 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.

In holiday-affected trading, European natural gas prices were flat on Monday at around EUR 33.08, close to the intraday high. They had traded in a narrow range through the session. Softer demand continues to weigh on prices with them down 21.7% in April but the fall has attracted Asian buyers. Soft manufacturing PMIs point to industrial usage remaining lacklustre or even deteriorating as US trade policy worries producers.

• Lower prices and a change in the weather as well as increased renewables-generated power have allowed the EU to begin refilling storage ahead of next winter and are now at over 40% although still below the 50% 5-year average.
• Bloomberg reported that the EU is about to present a plan to finish Russian gas imports by end-2027, but with increased supply expected by then the shift may have a limited impact on gas prices.
• US gas fell 1.7% to $3.57 after rising to $3.75 yesterday. In the near-term, the weather is expected to be mild but then warm up around mid-May, according to NatGasWeather, with the possibility of some cooling demand then.
• Yesterday lower-48 US production rose 4.6% y/y, while demand fell 4.1% y/y. The previous week EIA-reported US inventories returned to the 5-year average, according to Bloomberg.
• Flows at the US’ Freeport LNG facility have picked up again after power issues but one train remains offline at Cameron due to planned maintenance.

After initially trying higher on a better than expected ISM services print risk could not hold onto these gains and closed poorly. (Bloomberg) -- Macquarie Group Ltd. Chief Executive Officer Shemara Wikramanayake said Australia’s economy is looking resilient and is set up well to withstand the shocks emanating from US trade policy. “The economy is coming into this really quite resilient,” she said at the Macquarie Australia Conference in Sydney on Tuesday. “Capital is coming into this market.” “Australia is once again going to prove one of the more resilient economies in the world,” Wikramanayake said. 

• EUR/AUD - Overnight range 1.7464 - 1.7531. Asia is trading around 1.7505. The first support around 1.7600 was broken on Friday as the AUD outperforms. Sellers should remerge now back towards 1.77/78, with upward momentum broken this pair looks a little directionless.
• GBP/AUD - Overnight range 2.0482 - 2.0563. Asia is trading around 2.0570. A good break lower on Friday, a reduction in some longs potentially targets the 2.02/03 area. A bounce back towards 2.0800 should now see sellers first up.
• AUD/JPY - Overnight range 92.94 - 93.47, Asia is trading around 92.85. AUD/JPY has had a powerful extension as shorts are pared back. Price is now moving towards testing the Weekly resistance seen between 94.00/96.00 sellers should remerge here.
• AUD/NZD -  Overnight range 1.0819 - 1.0854, the cross is dealing in Asia around 1.0840. Sellers could be expected again around these levels, a move back above 1.0900 would negate the bearish trend.

Fig 1: AUD/JPY spot Daily Chart

Source: MNI - Market News/Bloomberg