CNH: USD/CNH Back Sub 7.3000, Trump States China Final Tariff To Be Lower

• RES 3: 147.74 - High Jan 15 and bull trigger (cont)
• RES 2: 146.53 - High Aug 6 
• RES 1: 142.73/144.48 - High Dec 9 / High Nov 11  
• PRICE: 138.12 @ 16:12 GMT Mar 21
• SUP 1: 136.67 - 1.0% 10-dma envelope
• SUP 2: 136.57 - 1.382 proj of the Jan 28 - Feb 20 - Feb 26 bear leg   
• SUP 3: 134.89 - 2.000 proj of the Jan 28 - Feb 20 - Feb 26 bear leg

JGBs have traded lower breaching recent key support at 138.71, the Feb 21 low. This confirms a resumption of the bear leg and note too that MA studies are in a bear-mode set-up, highlighting a downtrend. Sights are on 136.57, a Fibonacci projection. For bulls, a show through 140.33 resistance would signal a possible reversal, and open early December highs should the pace be maintained. 144.48 is the medium-term target on any recovery.

Bidding at today’s A$300mn of the 4.75% 21 June 2054 Treasury Bond is likely to be shaped by several key factors: 

• The outright yield is around the same level as the previous auction level but around 15bps lower than the January high.
• The 3/10 yield curve has steepened around 5bps since the last auction and hovers near its steepest level since mid-2022.
• Demand for duration should be supported by the improvement in sentiment toward longer-dated global bonds, which has strengthened since mid-January despite some deterioration over recent weeks.
• Results are due at 0000 GMT / 1100 AEST.

The Australian Office of Financial Management (AOFM) will today sell A$300mn of the 4.75% 21 June 2054 Treasury Bond. The line was last sold on 28 January 2025 for A$300mn. The sale drew an average yield of 4.9405%, at a high yield of 4.945% and was covered 3.6500x. There were 58 bidders, 22 of which were successful and 15 were allocated in full. The amount allotted at the highest yield as a percentage of the bid at that yield was 23.5%.

• This week's ACGB supply is larger than the recent average weekly issuance of $1500mn, with A$800mn of the 3.50% 21 December 2034 bond to be issued on Wednesday and A$700mn of the 1.25% 21 May 2032 bond due on Friday.
• According to the MYEFO 2024-25 Issuance Program Update from the Australian Office of Financial Management (AOFM), total issuance was revised to approximately A$95 billion, with A$46.4 billion completed at that time. This included around A$2 billion in Green Treasury Bond tenders, of which A$600 million had been issued at that time, and A$3 billion in Treasury Indexed Bonds, with A$1.7 billion completed at that time.
• Results are due at 0000 GMT / 1100 AEST.