OIL: Better Risk Tone & Technicals Drive Crude Recovery

In local morning trade, NZGBs are 4-5bps cheaper after US tsys were pressured following Friday’s US Employment Report for January. 

• US tsys gapped richer after lower-than-expected jobs gains for January, and a small dip in the unemployment rate -- but quickly reversed on robust two-month net revisions along with a smaller-than-expected benchmark revision.
• Wage growth meanwhile surprisingly accelerated but against a notable caveat of average weekly hours sliding to lows last seen in the depths of the pandemic and mid-2010 (that’s despite the BLS saying adverse weather played no impact).
• Headlines have crossed from Bloomberg, with US President Trump stating that the US will announce tariffs of 25% on all steel and aluminium imports from Monday. Trump didn't announce a time when these tariffs will take effect.
• Swap rates are 4-6bps higher, with the 2s10s curve steeper.
• RBNZ dated OIS pricing is little changed. 49bps of easing is priced for February, with a cumulative 122bps by November 2025.
• Today, the local calendar is empty. The next event is a State of the Economy presentation by Treasury Chief Economic Adviser Dominick Stephens on Wednesday. The next data release is Card Spending on Thursday. 

• Bank of Thailand to Sell THB60bn of 91-Days Bills
• Thailand to Sell THB30bm of 181-Days Bills.
• Taiwan to Sell NT$30 Billion 10-Year Bonds
• Philippines To Sell PHP 7.0Bln 91D Bills (PH0000058562)
• Philippines To Sell PHP 7.0Bln 182D Bills (PH0000059149)
• Philippines To Sell PHP 8.0Bln 364D Bills (PH0000059917)
• Bank of Korea to Sell KRW500bn 91-Day Bonds
• South Korea to Sell KRW3tn Won 3-Year Bonds

The USD is better bid post earlier tariff headlines from US President Trump, which stated that the US will impose 25% tariffs on all imports of steel and aluminium from Monday (when they will kick in wasn't specified), per Bloomberg. 

• AUD/USD is the weakest performer, back to 0.6235/40, off close to 0.60% versus end Friday levels. NZD/USD is down more modestly, last near 0.5640 (off 0.30%). At face value given Australia's iron ore, coking coal exports, such a tariff would impact Australia more than New Zealand.
• For AUD, downside focus will rest at 0.6171 the Feb 4 low.
• EUR/USD is off 0.45% to 1.0280, although liquidity may still be lighter for this pair. The Feb 4 for this pair at 1.0272 isn't far away. CAD is off 0.45%, NOK down 0.55%, but again liquidity is likely to be a factor.  
• USD/JPY is little changed in latest dealings, last near 151.40/45, so outperforming from a safe haven status stand point.