US TSYS: Short-End Tsys Outperform As Curve Steepens Following FOMC Minutes

• 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: 95.615/851 - High Dec 31 / High Dec 11 
• PRICE: 95.490 @ 16:37 GMT Jan 20
• SUP 1: 95.275 - Low Nov 14  (cont) and a key support 
• SUP 2: 94.477 - 1.000 proj of the Dec 11 - 23 - 31 price swing
• SUP 3: 94.495 - 1.0% 10-dma envelope

The Aussie 10-yr futures contract continues to trade below the Dec 11 high of 95.851, and has traded through the Dec low. A stronger bearish theme would expose 95.275, the Nov 14 low and a key support. Clearance of this level would strengthen a bearish theme. 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.

Seasonally-adjusted card spending in NZ rose 1.5% m/m in December to be up 1.2% y/y, the highest since February. Retail transactions were even stronger on the month rising 2% m/m, the fifth consecutive increase, but are only 0.6% y/y higher. 125bp of monetary easing and lower inflation appear to be encouraging consumers to spend again. 

• Q4 total card spending values rose 1.0% q/q after a flat Q3. Also, December ANZ consumer confidence returned to the breakeven 100 level and its highest in over three years. Real private consumption fell 0.3% q/q in Q3 but the outlook appears to be improving and Q4 is unlikely to be so weak.
• Core retail expenditure rose 1.8% m/m in December. Major categories saw growth including durables (+3.7%), consumables (+1.4%), hospitality (+1%) and apparel (+3.1%). Motor vehicle spending fell 1.3% m/m though.
• Non-retail transactions rose 1.0% m/m, while services increased 2.0% m/m.

NZ retail sales y/y%

• Gold prices rose during the course of Monday following a Wall Street Journal Report that incoming President Trump may not implement tariffs immediately.
• The report’s release drove the USD weaker thus supporting gold.
• Gold had faded to a low yesterday of US$2,689.47 before rebounding to $2,713.81 before closing at $2,708.21.
• Gold’s upward trending bias remains intact as it trades above all major technical levels.
• Key technical levels are 20-day EMA $2,668.88, 50-day EMA $2,653.34, 100-day EMA $2,614.11 and 200-day EMA $2.
• Pakistan’s deal with Saudi Arabia to buy a stake in the gold mining project owned by Barrick Gold Corp remains unresolved as Pakistan officials hope to secure some refining activities within the country rather than the raw product leaving for elsewhere.
• The mining sector could be in for a massive year of M&A as BBG reports on rumours that two of the largest global mining companies, Rio Tinto and Glencore are in early stages of merger talks.