GOLD: Gold Bulls Resume in Asian Trading. 

Today’s 5-year bond auction demonstrated mixed demand metrics, with the auction price surpassing dealer expectations of 100.07. However, the cover ratio declined significantly to 3.8158x from 4.4177x. Meanwhile, the auction tail was unchanged compared to last month at 0.01.

• These results contrast with the stronger demand observed in this month’s 10-Year bond auction.
• Given that today’s 5-Year offering was priced approximately 15bps higher than last month, marking a cyclical peak, the outcome is likely to be viewed as somewhat disappointing.
• Following the auction, the 5-Year JGB has richened slightly in early afternoon trading, while JGB futures have weakened, retreating to session lows.

Chinese stocks surged as the US considered gradual tariff hikes, boosting sentiment alongside pledges from Chinese authorities to stabilize markets. The CSI 300 has gained 2%, ending a four-day losing streak, while the Shenzhen Composite and Shanghai Composite are 2.7% and 1.9%, respectively. Major gainers included Beijing Kingsoft Office Software (+8.7%) and Hithink RoyalFlush Information Network (+8.8%). A gauge of Chinese stocks in Hong Kong climbed 1.6%, with the Hang Seng Index benefiting from oversold conditions, last up 1.70%. Investors anticipate positive measures from a regulatory briefing on financial support for economic development later today.

• Trump's economic team is considering a gradual rollout of tariffs, increasing 2-5% monthly, to enhance negotiating leverage while minimizing inflation risks. However uncertainty remains around trade policies is fueling global economic headwinds and driving up long-term borrowing costs, as per BBG.
• Chinese travel-related stocks, such as China Eastern Airlines and TongCheng Travel, gained after the government announced plans to boost tourism through the use of vouchers and expansion of its visa-free policy.
• Chinese pharmaceutical stocks rise after China vows to continuously adjust the country’s catalog of medicines covered by insurance to include qualified innovative drugs.
• GS is expecting the Chinese government to deploy extra monetary and fiscal easing and support for the home market.
• The HSI is likely benefitting from extreme oversold conditions as the HSI put/call ratio nears lows.
• Across the market, small-cap equities are outperforming large-cap today, with the CSI 1000 & 2000 up 3.55% & 4.10% respectively, while Tech stocks are the top performing sector in the CSI 300, financials & Property lagging. While in Hong Kong, the HS Tech Index is trading 3.65% higher while the Mainland Property Index is up just 1.15%.
• Some point through the session there will be a briefing from Chinese regulators, this could lead to positive headlines which could support Greater Chinese stocks.

• The NZD/USD is trading above Monday's highs, last +0.38% at 0.5604 as NZGBS yields surge with the 2yr rising 11.1bps to 3.751%, following the Q4 NZIER Business Opinion Survey.
• The currency still remains in a bearish trend, with 0.5640 (20-day EMA) seen as key resistance, the pair hasn't managed to trade above the 20-day EMA level since early October.
• AUD/NZD has seen a 0.26% drop last 1.1035, although we still remain trading within the past 3 months range of 1.1000-1.1100.
• RBNZ dated OIS pricing is 3-18bps firmer across meetings, with late 2025 leading. 45bps of easing is priced for February, with a cumulative 108bps by November 2025. The expected official rate for November has firmed 30bps since Friday’s close.