AUSSIE BONDS: Cheaper, Trump Aftermarket HLs In Focus, Light Local Calendar

European natural gas prices fell 0.9% to EUR 42.22 to be down almost 5% this month as the market watches ongoing talks with the US for a Ukraine peace deal in Saudi Arabia. Hopes remain that sanctions on Russia will be eased before next winter. Another period of cold weather in Europe is expected in early April, which could increase heating demand and impact already depleted inventories. 

• Morgan Stanley estimated that Europe has bought around 35% of global LNG in 2025 to date, 10pp higher than 2024. Erste Group believes that it will need an additional 250 LNG shipments this year to refill storage assuming pipeline flows from Russia don’t resume. Last summer Europe had to compete with Asia for supplies as the latter faced a heatwave and sharply higher cooling demand.
• Europe will ban Russian LNG tankers stopping in its ports from March 27, which could disrupt shipments headed for Asia.
• Prices for summer contracts remain above the April and November/December contracts but the spread has narrowed significantly and they are now under EUR 43.
• US gas fell almost 2% on Monday to $3.91 on expectations of less heating demand as spring progresses. But weather forecasts have shifted cooler, especially for the northeastern US, at the end of March/early April, according to Atmospheric G2.
• Power has been disrupted to Texas’ Freeport LNG facility following a lightning strike.
• Bloomberg notes that LNG imports into China are down 20% y/y due to soft demand and more piped gas. This is allowing more shipments to go to Europe. 

• RES 3: 147.74 - High Jan 15 and bull trigger (cont)
• RES 2: 146.53 - High Aug 6 
• RES 1: 142.73/144.48 - High Dec 9 / High Nov 11  
• PRICE: 137.72 @ 16:12 GMT Mar 21
• SUP 1: 136.67 - 1.0% 10-dma envelope
• SUP 2: 136.57 - 1.382 proj of the Jan 28 - Feb 20 - Feb 26 bear leg   
• SUP 3: 134.89 - 2.000 proj of the Jan 28 - Feb 20 - Feb 26 bear leg

JGBs have traded lower breaching recent key support at 138.71, the Feb 21 low. This confirms a resumption of the bear leg and note too that MA studies are in a bear-mode set-up, highlighting a downtrend. Sights are on 136.57, a Fibonacci projection. For bulls, a show through 140.33 resistance would signal a possible reversal, and open early December highs should the pace be maintained. 144.48 is the medium-term target on any recovery.

USD/CNH mostly stayed on the front foot through the course of Monday's session. We track near 7.2640/45 in early Tuesday dealings, after posting a modest 0.09% loss in CNH terms on Monday. Spot USD/CNY finished up at 7.2607. The CNY CFETS basket tracker edged a little again on Monday, +0.10% to 98.8805. The index continues to recover from lows amidst higher USD index levels. 

• Monday's further modest CNH loss was still the fifth straight decline for the currency. USD/CNH is now back to the 50-day EMA resistance point, which near 7.2650 is close to current spot levels. We are above all other key EMAs. Early March highs in USD/CNH were above 7.3000. The 200-day is back near 7.2400.
• The USD/CNY fixing continues to show a modest upside bias (Monday's print at 7.1780), although there is still a gap with Jan 20's fixing of 7.1886. Nevertheless, this is still probably providing some encouragement to yuan bears.
• CNH didn't appear to see much relief from Trump's comments on more targeted tariffs. There doesn't to have been much progress in terms of lowering tensions between the US and China on trade issues.
• The firmer US yield backdrop/higher equities from Monday, post the Trump tariff headlines and with some data support (better services PMI print) likely helped keep USD/CNH dips supported.
• Locally today, the 1yr MLF is scheduled, but no change is expected from the current 2.00% rate. This rate is being de-emphasized though as a policy tool.