OIL: Another Large US Crude Drawdown As Gasoline Stocks Rise

Fresh off last week's Hawkish Hold (rates kept at 3.50%–3.75%) that saw the 10-Yr +7bps for the week, the market will look to Fed officials who speak this week to see if the if higher-for-longer narrative is growing.  NY Fed President John Williams (today), Governor Bowman (Tuesday), and Austan Goolsbee (Wednesday) will kick things off and markets will look for any mention of the "neutral rate." If speakers suggest that the high energy prices are raising the long-term floor for interest rates, expect the yield curve to bear-flatten further.

Whilst manufacturing is starting to moderate, the ISM Services Index is the real heartbeat of U.S. inflation.  The prices paid component is the most critical number of the week. Last month it hit 70.7. If it stays at these levels, it confirms that the oil spike is leaking into the broader economy, which is and further confirms the higher for longer.   

This week is non farm payrolls with markets are looking for roughly 62ks, a sharp slowdown from previous months.   Currently at 4.3%. If this ticks up to 4.4% or 4.5%, the move in yields will be interesting - whether growth bears will win over inflationary hawks.   

• The 2-Yr finished at 3.882% (+9bps for the week)
• The 5-Yr finished at 4.016% (+9bps)
• The 10-Yr at 4.372% (+7bps)
• The 30-yr finished at 4.963% (+5bps)

Key Technical Levels - 10-Year Yield: Resistance at 4.44%. If this breaks, there is very little technical support until 4.60%.

The 10-Yr bond future is up +03+ at 110-24+ in morning trade.  

The AUD/USD had a range Friday night of 0.71184-0.7203, Asia is currently trading around 0.7215. The AUD held dips towards 0.7180 on Friday as the bulls look to have a test of this 0.72-0.73 area. The pair has opened firmer this morning as Trump says he is to begin escorting some ships though the Straits, the market still waits for any concrete signs of peace talks resuming though Trump has said on Sunday that “very positive discussion” were underway. On the day, the bulls will be looking to gain some momentum above the 0.7200 area which has capped the move recently, a sustained push above 0.7200-0.7300 could imply a move back to 0.75-0.77. The first support is toward 0.7160-0.7180 and the bulls will be hoping this early Asian positive start can be built on.

• Bloomberg - “Australia’s central bank is set to entrench its status as a hawkish outlier with a third straight interest-rate hike, diverging from peers that are mainly sitting tight to observe fallout from the US-Iran conflict.” - BBG
• CFTC Data up to 28/04/2026 shows Asset managers adding to their recently acquired longs, +43311(Last +35554). The Leveraged community also added slightly to their own core longs, +48299(Last +47218).  
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.7200(AUD942m), 0.7250(AUD800m). Upcoming Close Strikes : 0.7050(AUD1.34b May 7), 0.7200(AUD987m May 7), 0.7250(AUD1.91b May 7) - BBG
• The AUD/USD Average True Range for the last 10 Trading days: 58 Points
• Data/Event: Melbourne Institute Inflation, ANZ-Indeed Job Advertisements, Building Approvals 

 Fig 1: AUD CFTC Data

Source: MNI - Market News/Bloomberg Finance L.P

• RES 3: 95.568 - 61.8% retracement Oct’ 25 - Jan’ 26 downleg
• RES 2: 95.465 - 50.0% retracement Oct’ 25 - Jan’ 26 downleg
• RES 1: 95.425 - High Dec 1 ‘25 (cont)
• PRICE: 94.975 @ 16:02 BST May 01
• SUP 1: 94.780 - Low Mar 23
• SUP 2: 94.664 - 76.4% retracement of the 2008 - 2020 rally
• SUP 3: 94.031 - 1.0% 10-dma envelope

Aussie 10-yr futures traded on a more stable footing Friday after undergoing several spells of weakness mid-week. Prices broke through resistance-turned-support at 95.040, the 23.6% retracement of the upleg posted off the March low. Resistance in focus at 95.120 into 95.425, while 94.780 undercuts as support.