AUSSIE BONDS: 10yr Futures Challenge 20-day EMA Resistance, Jobs Data Tomorrow
Aussie bond futures are higher, led by the 3yr. YM was last +7bps to 95.06, just off session highs (95.07), while 10yr futures (XM) were +6bps to 94.74. For the 10yr this is challenging 20-day EMA resistance (around 94.74), with a break higher bringing 94.80 (early Sep highs) into focus. For the 3yr, upside 20-day EMA resistance rests at (95.12). Recent lows were at 94.875 from Sep 14. UST futures have risen, TYZ6 last 106-07, +07 for the day. Oil futures continue to correct lower, now tracking down for the sixth straight session, which is aiding these futures moves. Increased supply hopes (returning supply from Saudi Arabia), along with US/Iran talks, continue to weigh on oil (WTI is now 12.5% off mid Sep highs). * ACGB yields are 5-6.5bps lower across the benchmarks, with the front end leading the move. The 3yr was last 4.93%, the 10yr close to 5.24%. The 3yr is capped above 5.0% for now. RBA market pricing for next week's meeting remains close to 90%, while longer dated OIS levels have softened modestly today. * On the data front, Sep preliminary PMIs fell versus August reads, particularly for manufacturing. However, looking at the quarter as a whole, Q3 services PMI was also hi
Aussie bond futures are higher, led by the 3yr. 74. 80 (early Sep highs) into focus. 12).
875 from Sep 14. UST futures have risen, TYZ6 last 106-07, +07 for the day. Oil futures continue to correct lower, now tracking down for the sixth straight session, which is aiding these futures moves. 5% off mid Sep highs).
5bps lower across the benchmarks, with the front end leading the move. 24%. 0% for now. RBA market pricing for next week's meeting remains close to 90%, while longer dated OIS levels have softened modestly today.
* On the data front, Sep preliminary PMIs fell versus August reads, particularly for manufacturing. However, looking at the quarter as a whole, Q3 services PMI was also higher than Q1 and Q4 signalling resilience. Cost growth rose to its highest for Q3 driven by services but importantly selling price inflation also increased implying increased cost pass through but both measures are below Q2's highs. The RBA will continue to watch second-round effects from higher fuel costs as it worries upside inflation risks are "materialising".
9% respectively. The data are volatile and so 3-month averages are needed to gauge the trend. They have signalled a gradual easing in labour market conditions, which the RBA has welcomed in its fight to return inflation to target.