NZD: Back Above 0.5700, But Recent Ranges Holding, EUR/NZD above 1.9100

The yen is outperforming broader USD gains in the first part of Monday trade. This follows fresh tariff headlines from US President Trump, that 25% tariffs will be imposed on all steel and aluminium imports today (although no timeline was specified in terms of when they will come into effect). USD/JPY was last little changed at 151.50/55. We saw dips on Friday sub the 151.00 level supported on a number of occasions. A clean break sub 150.93 (the low from last Friday) could see the Dec 9 low from last year targeted at 149.69. On the upside, the Jan 6 high was at 152.89.

• The meeting between Japan PM Ishiba and US President Trump from late last week will likely be seen as a success from a Japan standpoint. The US leader doesn't appear to have Japan in his crosshairs from a trade standpoint at this stage, although does want top eliminated the trade deficit the US has with Japan. Ishiba spoke about raising Japan imports of US LNG and boosting Japan investment into the US.
• CAD is off 0.55% against the USD (major steel exporter to the US), while EUR is down 0.30% and AUD off 0.40%, although EUR and the A$ are away from lows for the session. AUD/JPY is back under 95.00, last near 94.65/70, session lows rest at 94.30/35.
• Not being is Trump's trade crosshairs, coupled with traditional safe haven qualities is aiding yen so far today.
• Friday's session saw US-JP yield differentials tick higher in the wash up of the NFP report. This likely help keep dips under 151.00 supported.
• The local data calendar has Dec current account and trade balance figures today. We also have Jan bank lending figures and the eco watchers survey. 

• RES 3: 97.190 - High May 5 2023
• RES 2: 96.730/932 - High Sep 17 / 76.4% of Mar-Nov ‘23 bear leg
• RES 1: 96.290/360 High Feb 5 / High Dec 11 
• PRICE: 96.200 @ 16:36 GMT Feb 07
• SUP 1: 95.830 - 1.000 proj of the Dec 11 - 20 - 31 price swing 
• SUP 2: 95.760 - Low 14 Nov ‘24
• SUP 3: 95.480 - Low Jan 11 2023 and a major support 

A bear cycle in Aussie 3-yr futures remains intact and short-term gains are considered corrective. On the upside, a clear reversal higher would signal scope for an extension towards 96.360, the Dec 11 high. The recent move down reinforces the bear theme and the contract has traded through the December low. A deeper sell-off would refocus attention on 95.760, the 14 Nov ‘24 low. 

Oil prices were up moderately on Friday but coming off their intraday highs on news that US President Trump plans to announce “reciprocal” tariffs this week to “address the deficit”. This morning he has said that there will be universal 25% tariffs on steel and aluminium imports announced. Increased protectionism is making oil markets nervous because of their impact on global demand. The USD has strengthened in response.

• WTI rose 0.6% on Friday to $71.06/bbl after reaching a high of $71.41. It continues to trade below the 50-day EMA at $72.20 opening support at $70.43. Initial resistance is at $75.18, February 3 high. The benchmark approached oversold territory on Friday, according to Bloomberg.
• Brent is up 0.5% to $74.69/bbl to be down 1.3% this month. It remains below the 50-day EMA at $75.43 opening up support at $74.10, February 6 low. Initial resistance is at $78.80 with the bull trigger at $81.20.
• Oil is struggling with the highly uncertain outlook. It is concerned by the impact of 10% tariffs on US imports from China and China’s retaliatory measures, while 25% tariffs on Mexico and Canada have been delayed the outcome of that dispute remains unclear. Then there is the supply side with tighter enforcement of sanctions on Iran but Trump vowing to boost the US’ production. Before the new US administration 2025 was widely forecast to have a surplus.
• Bloomberg is reporting that Chinese refineries have reduced production rates to levels last seen during Covid with demand remaining soft and lower flows from Russia given the tightening of sanctions, especially on the shadow fleet.