AUD & NZD Firm, USD Down Slightly Despite Softer US TSYs

The BBDXY sits slightly lower for the session, not deriving much benefit from a pull back in US TSY futures. The index last sat near 1241.70, only marginally below NY closing levels from Thursday.

• Japan markets have been out today due to a national holiday, hence no US cash Tsy trading. Still, a number of Fed speakers have pushed back against the idea of early rate cuts, while Goldman's now sees 4 cuts this year, down from 5. The bank no longer expects the easing cycle to start in May.
• USD/JPY has been quite steady, not drifting too far from the 150.50 level, which is where we started the session.
• The AUD has outperformed, up around 0.25%, last near 0.6575. Thursday highs at 0.6595 remain intact, but a weaker HK/China equity tone hasn't disrupted sentiment. Offshore dividend inflows have been cited by the sell-side this week as a potential AUD support point.
• For NZD/USD, we are back above 0.6200, but trailing AUD gains at the margin. The AUD/NZD cross has firmed back to 1.0600, but hasn't been able to hold gains above this level.
• At the start of the session Q4 retail sales volumes were much weaker than expected. However, there was no last negative impact on NZD. We also have the RBNZ next week, and headlines crossed from TD Securities with a view change. They now expect that the RBNZ would raise the OCR 25bps next week to 5.75%, and to 6% in May.
• Looking ahead to later today, we have ECB as the main focus point, headlined by Lagarde. In the US session, the calendar is light for data and there is no Fed speak.