AUSSIE BONDS: Futures Higher As Oil Continues To Fall, 3yr Still Sub 20-day EMA
Aussie bond futures are biased higher in the first part of Wednesday trade, up 3bps for the benchmarks. YM (3yr future) was last 95.02, while XM (10yr) was last 94.71. The early bias in US Tsy futures is firmer, TYZ6 up +03+ to 106-03+, as WTI tracks softer from the open amid Hormuz/returning Saudi supply hopes. US Tsy futures saw some support overnight after Trump headline of "very productive" meeting between US & Iran officials crossed. * For Aussie bond futures, the 3yr is still some distance from an upside 20-day EMA resistance test (95.12). Recent lows rest at 94.875 from Sep 14. RBA rhetoric is still pointing to a hike next week, see below for a recap of Bullock's remarks yesterday. For the 10yr future, recent trends are a little more constructive, as oil continues to pull back from recent highs. 20-day EMA resistance, around 94.74 is close by. Sep 15 lows rest at 94.515 in terms of downside support. * ACGB yields are a lower in the first part of Wednesday trade, down around 3bps, the 3yr to 4.955%, while the 10yr is close to 5.265%. The AU-US 10yr spread is relatively steady, last around +30bps. * There was little discussion of inflation risks and the upcoming monetary polic
Aussie bond futures are biased higher in the first part of Wednesday trade, up 3bps for the benchmarks. 71. The early bias in US Tsy futures is firmer, TYZ6 up +03+ to 106-03+, as WTI tracks softer from the open amid Hormuz/returning Saudi supply hopes. US Tsy futures saw some support overnight after Trump headline of "very productive" meeting between US & Iran officials crossed.
12). 875 from Sep 14. RBA rhetoric is still pointing to a hike next week, see below for a recap of Bullock's remarks yesterday. For the 10yr future, recent trends are a little more constructive, as oil continues to pull back from recent highs.
74 is close by. 515 in terms of downside support. 265%. The AU-US 10yr spread is relatively steady, last around +30bps.
* There was little discussion of inflation risks and the upcoming monetary policy meeting during RBA Governor Bullock's fireside chat yesterday. She reiterated the sources of upside inflation risks and that the Board will consider whether they are materialising. The next meeting is 29 September and many expect a 25bp rate hike. * In August, the Board said that upside inflation risks stemmed from excess demand, ongoing Middle East conflict and rising inflation expectations.
Since then global oil prices are higher and disruptions to Red Sea traffic have increased. Bullock also noted that there is still excess demand in the Australian economy. She stated though that she is not signalling anything for the upcoming meeting. 5%, which is expected to be unchanged in August, is still a "bit tight" but if it edged towards 5%, it could be high enough to ease price pressures.
* Coming up shortly we have preliminary PMIs for Sep.