MNI EUROPEAN MARKETS ANALYSIS: USD Supported Despite Lower Oil

* Oil has continued to trend lower during Wednesday's APAC session as talks continue on the sidelines of this week's UN gathering. The fact negotiations are even taking place to facilitate Middle East energy shipments is driving optimism in markets but the situation remains very precarious. UST futures are higher, but remain within recent ranges. There has been no cash trading today, with Japan markets still out.

* The USD remains on the front foot, despite lower oil/higher UST futures. The BBDXY is near 1207 currently. 7, there was a pickup in Q3 signalling GDP growth may have improved in the quarter. * Look ahead: Eurozone flash PMIs highlight the Wednesday calendar, as markets then turn their focus to headlines emanating from the Trump-Xi summit in Washington.

Flash PMIs early in the US session, followed by Japan flash PMI. Australian employment data wraps up the midweek session. MARKETS US TSYS: Oil Aids Higher 10yr Futures, But Still Short Of 20-day EMA Test: t-of-20-day-ema-test-1790139374653 US 10yr futures (TYZ6) have been biased higher so far in Wednesday trade. We were last 106-07+, +07+.

5% off mid Sep highs, amid increased supply hopes and on reported positive US/Iran talks (albeit via mediators and with little in the way of fresh details). TYZ6 hasn't been able to sustain +106-08 levels since mid Sep and broader levels continue to hold. In terms of technical watch points, support below at 105-10+, the Oct 19 '23 low on the continuation chart. Initial firm resistance is 106-27, at the 20-day EMA.

* There has been no cash UST trading so far today in Asia Pac, with Japan markets still out (they return tomorrow). 961% (up 1bps). * Look ahead: Eurozone flash PMIs highlight the Wednesday calendar, as markets then turn their focus to headlines emanating from the Trump-Xi summit in Washington. Flash PMIs early in the US session, followed by Japan flash PMI.

Australian employment data wraps up the midweek session. AUSSIE BONDS: 10yr Futures Challenge 20-day EMA Resistance, Jobs Data Tomorrow: e-jobs-data-tomorrow-1790138668769 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.

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. 5% is still a "bit tight" but if it edged towards 5%, it could be high enough to ease price pressures.

8k decline in employment and analyst estimates on Bloomberg are between +10k and +47k with most +15 to +30k. Of the four large domestic banks, ANZ and CBA are below consensus forecasting +15k, NAB is in line at 20k, while Westpac's 30k is higher. 2k. 5k but it still expects hiring to slow through H2.

5%, including ANZ, CBA and Westpac. 43%, only a small change is needed for a lower rate. * Apart from the headline employment/unemployment data, it will be important to monitor other indicators which the RBA looks at, including youth unemployment and underemployment rates and hours worked. 1pp in July.

7, there was a pickup in Q3 signalling GDP growth may have improved in the quarter. 8, which was impacted by geopolitical uncertainty and jump in fuel prices. However, 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". The market has a 86% chance of hike on 29 September. /ABS * The growth outlook deteriorated further with business confidence falling to its softest in 3 months. Firms are pessimistic with the index running below the historical average due to elevated costs, "market demand and customer retention" worries.

2, lowest since June, still consistent with growth in the sector. 1. 3, weakest since December 2024, after recording 52s in both July and August. The deterioration was due to declining export orders.

The Q3 average though was in line with moderate growth seen through 2026. * Manufacturing reported an increase in supply-chain disruptions. * The PMIs showed a slight reduction in employment across sectors even though outstanding business increased. BONDS: NZGBS: Yields Retrace With Oil, 10yr Nears 20-day EMA: -day-ema-1790137473558 NZGB yields have faltered as the Wednesday session unfolded.

5bps across the curve, with the front end leading. 90%. Whilst there is no cash US Tsy trading in Asia Pac today (with Japan markets still out), the bias in the region has been for higher bond futures, amidst further declines in oil futures (now tracking lower for the sixth straight amid US/Iran discussions (via mediators) and increased supply hopes). For the NZ 2yr this more than unwinds yesterday's rise and puts us back around levels that prevailed at the end of last week.

* For the 10yr we are under end levels from last week and continue to unwind the mid Sep bounce. 885%. 75%, also unwinding yesterday's RBNZ induced rise. * The NZ-US 10yr spread is tracking lower, last -5bps, with Sep lows resting at -9bps.

* RBNZ hike expectations for Oct have been trimmed modestly, last back to around 65%, after rising above 70% after hawkish RBNZ remarks yesterday. * NZ rates markets will likely continue to take their cues from offshore/oil developments in light of no local data this week. 12%. The US Dollar is having another crack at challenging the pivotal 1205-1207 area.

It failed at the second time of asking overnight but this price action continues to catch the eye as risk trades firmly on the front foot. The US Dollar continues to lag and diverge from the rebound seen in the broader market. A sustained break back above the 1205-1207 area would have me thinking we could potentially see the USD turn higher again. Something I would have previously thought would have been a tough ask while US equities and broader risk continues to build on their rebound.

While the market works through how it wants to proceed, I suspect we could continue to see a range of 1197-1207 play out. 17%. 1500 area, pretty telling price action. 1600 area pivotal for me.

Can the US Dollar continue to ignore the surge in risk? It needs to break higher for this move lower in the EUR to gain momentum from here. 1700 where you are wrong. The price action is now turning decidedly bearish and I suspect rallies are now likely to be faded short-term.

1600 area comes back into play. 20%. 3450 area. 3650 range.

3500 to now turn into resistance at the first time of asking. * Data: France Sept. HCOB PMIs, Germany Sept. HCOB PMIs, Eurozone Sept.

PMIs, UK S&P Global/CIPS Aug. PMIs, US MBA Mortgage Applications, US S&P Global Sept. 16%. 00 with the market wary of intervention after reports the BOJ might have conducted a rate check around that level on Friday night.

All in all though last week was not great for the Yen and those potential green shoots that had just started to take root, CFTC data showed the market turning long for the first time(ouch). A dovish hike thanks to the Takaichi appointments and a BOJ that will not give a signal to the timing of the next hike, while the Fed comes out hawkish is not a recipe to encourage those buyers to add to positions. The 149-152 area has now proved to be solid support again. 00 area which technically looks important now.

The BOJ was probably also reminding the market it is around as Japan enjoys a three-day holiday which could further impact liquidity. 23b). 52b Sept 24) - BBG. 15%.

1500 area, pretty telling price action. The US Dollar's pullback has been non-existent to say the least when compared to the reversal across the broader market. Does it play catch up at some point or is this price action telling us something more. 1600 area pivotal for me.

Can the US Dollar continue to ignore the surge in risk? It needs to break higher for this move lower in the EUR to gain momentum from here. 1700 where you are wrong. The price action is now turning decidedly bearish and I suspect rallies are now likely to be faded short-term.

1600 area comes back into play. 1350. 0 Shock - ECB. 0 shock, according to a box in the ECB's Economic Bulletin published on Tuesday.

28b). 21%. 7100 albeit with an offered tone unable to get any upward momentum as of yet. Risk continues to trade on the front foot, with Oil falling again on Trump reporting a productive meeting with Iran.

Yet currencies continue to trade with a heavy tone, there is a clear disconnect and the relationship between Risk and the US Dollar seems to be diverging. How long does that last? What is telling us? The AUD has been a favoured long while risk trades on the front foot, in the current environment I would have expected it to be performing better.

7100 holds the Bulls will continue in their attempt to reassert its uptrend. 7160 area initially. 7050 would start to become problematic. * MNI: Payback Expected For July's Weak Employment Outcome, Data Volatile.

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. 5% is still a "bit tight" but if it edged towards 5%, it could be high enough to ease price pressures.

7, there was a pickup in Q3 signalling GDP growth may have improved in the quarter. 8, which was impacted by geopolitical uncertainty and jump in fuel prices. However, 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". The market has a 86% chance of a hike on 29 September. 7180(AUD578m).