ASIA: Government Bond Issuance Today. 

In local morning trade, NZGBs are 6bps cheaper after US tsy yields gapped higher after Friday’s larger-than-expected December non-farm and private payroll gains and a dip in the unemployment rate. The US 2-year yield rose 12bps to 4.38%, while the 10-year rose 7bps to 4.76%, the highest since November 2023.

• The 256k in December leaves a strong recent trend, with 255k in September, an average of 128k for those two months (initially 132k) before surprisingly reaccelerating again. The unemployment rate of 4.086% in December after very small downward revisions in the prior two months, with 4.23% in November (initially 4.246%) and 4.14% in October (initially 4.15%).
• This week, CPI and PPI inflation measures are on Wednesday and Thursday, respectively. The scheduled Fed speaker docket is muted with the Fed Blackout on Friday.
• NZ home-building approvals rose 5.3% m/m in November, while filled jobs rose 0.3% m/m in November, the first increase since March. Filled jobs rise by 5,980 after declining by ~41,000 from March – October.
• Swap rates are 4-5bps higher.
• RBNZ dated OIS pricing is flat to 2bps firmer across meetings. 51bps of easing is priced for February, with a cumulative 129bps by November 2025.

• NZD/USD fell 0.77% to 0.5557 on Friday, as the USD rallied and hit highest level since Nov. 2022 after the December US jobs report exceeded estimates by a wide margin, with 256,000 jobs added and a 4.1% unemployment rate. All G-10 peers fell against the greenback, with the NZD falling to it's lowest levels since Oct 2022.
• New Zealand's Building approvals jumped 5.3% m/m in November, from a 5.2% decline the month prior, while filled jobs rose 0.30% from a revised -0.2% the month prior
• Technical indicators suggest bearish momentum, with the pair at risk of testing the 13-year low of 0.5470 if it breaks below 0.5500. Initial support is 0.5543 (Jan 10 lows), while to the upside a break above 0.5642 (20-day EMA) before any sort of momentum change can occur.
• The NZ-US 2yr swap fell 10bps on Friday, hitting a new low of -95.5bps, before closing at -94bps. We now trade just off the all time lows off -100bps
• RBNZ dated OIS is pricing in 49bps of cuts at the Feb meeting, and a further 25bps of cut in April, while there is 133bps of cumulative cuts priced in by Oct 2025
• No large nearby strikes Monday, with notable upcoming strikes: 0.5875 (NZD606m Jan. 15), 0.5885 (NZD453.7m Jan. 16), 0.6075 (NZD425.8m Jan. 15)
• There is little else on the calendar today and a slow week is to following with just Food prices on Thursday and BusinessNZ Mfg PMI on Friday

AUD/USD got to fresh cycle lows of 0.6140 on Friday in the aftermath of the stronger than expected US NFP data. We track slightly higher in early Monday dealings, last near 0.6150, after losing 0.80% for Friday's session to be among the worst G10 performers. Only JPY rose against the USD for Friday's session. The USD BBDXY index got to fresh highs above 1320. 

• For AUD/USD technicals, the bears remain in control. Round figure support at 0.6100 will be eyed, while 0.6045 and 0.5994 are projections level of the Sep 30 - Nov 6 - 7 price swing. Initial firm resistance to monitor is 0.6257, 20-day EMA. The 50-day EMA is at 0.6374. The pair was last sub 0.6000 during the onset of the Covid pandemic in 2020, we saw lows of 0.5510 before support emerged.
• US yields were stronger across the board post the US NFP beat, the 10yr rising to 4.76%, the 2yr 4.38%, in terms of Tsy yields. Fed rate cut expectations were also tempered further.
• The US real 10yr yield rose to 2.34%, fresh highs back to 2023, and was a headwind for US equity market sentiment. The SPX fell 1.54%. AUD/JPY fell sub 97.00, but tracks just above 97.00 in early Monday dealings, still within recent ranges back to Dec last year.
• The aggregate commodity index rose 2.04% per BBG (aided by oil after fresh US oil sanctions on Russia boosted crude), the base metals up nearly 0.80%, but this didn't help the A$ too much.
• Today on the data front we have the Melbourne Institute Inflation gauge and ANZ job adverts. On Thursday we get Dec jobs data.