JGBS: Futures Higher Overnight With US Tsys Ahead Of Liberation Day

In post-Tokyo trade on Friday, JGB futures closed weaker, -5 compared to settlement levels.

•  US tsys rallied back to mid-December yield lows on Friday. Global trade, tariff uncertainty, and data that leaned towards softer inflation remained supportive.
• US tsys posted its biggest monthly gain since July, with short-term yields falling below 4% after benign inflation data boosted wagers on Federal Reserve interest-rate cuts.
• US Core PCE eased to 2.647% y/y from an upward revised 2.865% y/y (initial 2.794%) in Dec, as it starts to be helped by more favourable base effects.  
• Meanwhile, Chicago PMI, produced with MNI increased 6.0 points to 45.5 in February. This is the second consecutive monthly gain, taking the reading to the highest level since June 2024, though it remains in contractionary territory for the fifteenth consecutive month.
• USD gained ground after President Trump & Zelenskyy failed to reach an accord, chances of an imminent ceasefire looking less likely.
• Today, the local calendar will see Jibun Bank PMI Mfg.

• Gold finished last week down for the first time in 2025, falling by 2.6%.
• Earlier last week, gold hit all time highs of US$2,951.73 and has trended lower since.
• Gold has exhibited its ‘safe-haven’ status given the uncertainty around the implementation of tariffs by President Trump in 2025, which followed on from last 2024 when it performed due to expected rate cuts.
• The moves in recent trading sessions come despite the fundamental reasons for its rally remaining in place.
• The move lower last week still sees gold up over 8% for the year and opens at $2,873.31 in Asian trading follow Friday's close of  $2,857.83
• The move lower however sees gold breach eh 20-day EMA of $2,879.36, marking the first breach of this technical level this year.
• The moving averages are still trending upwards, a sign that the bullish momentum remains after eight successive weeks of gains. 
•  It appears that the US is moving closer to imposing tariffs on Canada, Mexico and China as soon as this week, a move that could see support for gold return. 

• RES 3: 96.501 - 76.4% of the Mar 14 - Nov 1 ‘23 bear leg
• RES 2: 96.207 - 61.8% of the Mar 14 - Nov 1 ‘23 bear leg
• RES 1: 95.685/851 - High Feb 7 / High Dec 11 
• PRICE: 95.655 @ 15:49 GMT Feb 28
• SUP 1: 95.300 - Low Jan 14  
• SUP 2: 95.275 - Low Nov 14  (cont) and a key support
• SUP 3: 94.549 - 1.0% 10-dma envelope

Aussie 10-yr futures are maintaining the bounce, pushing prices closer toward first resistance. For bulls, a confirmed reversal and a breach of 95.851, the Dec 11 high, would instead reinstate a bull cycle and refocus attention on resistance at 96.207, a Fibonacci retracement point. A stronger bearish theme would expose 95.275, the Nov 14 low and a key support. Clearance of this level would strengthen a bearish condition.