GOLD: Gold Consolidates as Eyes on Tariff News  

USD/CNH spent much of Monday's US session above 7.2500. The pair tracks close to 7.2540 in early Tuesday dealings. CNH was little changed in aggregate for Monday's session, after earlier posting a low of 7.2259. Spot USD/CNY finished up at 7.2463. The CNY CFETS basket tracker edged down a little further to 99.55 (per BBG). This index has only risen on 2 trading days in Feb so far. 

• For USD/CNH, EUR moving off its highs above 1.0500, weighed late yesterday, while in Monday US trade, the Golden Dragon index slumped 5.24%. Recent announcements by the Trump administration around curbing China investment into key sectors and looking to target China made ships (with fees) were likely headwinds for sentiment.
• This followed only modest drops for onshore equities (-0.22% for CSI 300) and the aggregate HSI in Hong Kong (off 0.58%).
• Trump also remarked earlier that tariffs on Mexico and Canada were moving forward. While it was also reported over the weekend the US administration had asked Mexico to tariff imports from China.
• Market sentiment around tariff/trade tensions with the US is likely remain skittish. Last week Trump stated a trade deal with China was possible, which leaves a wide spectrum of outcomes and market reactions as possible.  
• For USD/CNH technicals, yesterday's break sub the 200-day EMA couldn't be sustained. This support zone rests close to 7.2355. On the topside we are close to the 100-day EMA resistance point (near 7.2590).
• On the data front, the 1yr MLF is due, but no change is expected in the 2% rate. 

In local morning trade, NZGBs are slightly richer after US tsys benefited again from haven buying amid ongoing concerns over the Trump administration's trade policy and multi-week lows for equities.

• Projected US rate cuts through mid-2025 were steady to firmer: Mar'25 at -0.5bp, May'25 at -7.1bp, Jun'25 at -18.0bp, Jul'25 at -25.6bp.
• Cross asset update: Crude mildly higher (WTI +.22 at 70.62; Gold climbing 13.55 at 2949.60; Bbg US$ index off lows at 1286.80 (+.57) as late President Trump comments on Canada & Mexico tariffs proceeding.
• The Cabinet will consider options to boost New Zealand’s fuel and energy security, including creating energy precincts and special economic zones (SEZ), Resources, Regional Development and Associate Energy Minister Shane Jones says in an emailed statement. (per BBG)
• Swap rates are 1bp lower.
• RBNZ dated OIS pricing is little changed. 26 bps of easing is priced for April, with a cumulative 58bps by November 2025.
• Today, the local calendar is empty.
• On Thursday, the NZ Treasury plans to sell NZ$225mn of the 3.00% Apr-29 bond, NZ$225mn of the 3.50% Apr-33 bond and NZ$50mn of the 1.75% May-41 bond.

• NZD/USD closed slightly lower, down 0.16% at 0.5733 on Monday, although still remains in an upward trend, well above last weeks lows of 0.5678. It's another quiet session on the data front for New Zealand, with any directional change likely coming for any geopolitical headlines, while US equity futures sold off overnight which could hurt high beta currencies such as NZD & AUD. Nvidia's earnings on Wednesday will be closely watched.
• Key levels to watch include, resistance is 0.5784 (100-Day EMA), a break here would open a move to retest 0.5800. To the downside, a break back below the 50-Day EMA at 0.5705 would open a move to the Feb 12 lows of 0.5600.
• No large nearby strikes Tues. Upcoming notable strikes: 0.5615 (NZD627m Feb. 28), 0.5440 (NZD335m Feb. 28), 0.5855 (NZD333.1m Feb. 28)
• RBNZ dated-OIS is fully pricing in a 25bps cut in April, while there is about a 70% chance of a further 25bps cut priced for May.
• The NZ-US 2yr swap rose 8bps on Friday, hitting -58bps, it continued to  rise on Monday hitting -56bps before closing at -57bps to be the highest since mid Decemeber
• The calender is empty today