AUSSIE BONDS: Apr-29 Supply Faces Dramatically Higher Yield Than Last Outing

• RES 3: 140.08 - High Jun 13  
• RES 2: 139.05 - High Aug 4 
• RES 1: 137.30 - High Sep 8 and key short-term resistance
• PRICE: 133.24 @ 16:15 GMT Dec 16
• SUP 1: 133.18 - Low Dec 16
• SUP 2: 132.78 - 2.0% Lower Bollinger Band
• SUP 3: 132.17 - 1.0% 10-dma envelope  

Prices traded to new pullback and cycle lows this week, weighed by building expectations of a December BoJ rate hike and a breach of support in futures prices. This affirms the firm downtrend that’s dominated prices since mid-September, and prices will need to challenge resistance before signaling any broader reversal.

The Australian Office of Financial Management (AOFM) will today sell A$1000mn of the 4.25% 21 October 2036 Treasury Bond. The line was issued via syndication on 23 July 2025 at a yield to maturity of 4.36%, with an issue size of $16bn in face value terms. Several key factors will likely shape investor demand at today’s auction: 

• The bond’s outright yield is at a fresh cycle high, 40bps higher than the issuance level.
• Sentiment toward longer-dated global bonds has improved recently, which may add to demand.
• The 3/10 yield curve is around its flattest level since March, approximately 25bps flatter than at the time of its syndicated sale.
• Overall, pricing is expected to remain firm, underpinned by a stable yield profile and a more attractive curve backdrop.
• Results are due at 0000 GMT / 1100 AEST.

Bloomberg Finance LP

Spot USD/CNH got to fresh lows of 7.0315 as Tuesday trade unfolded, before some support unfolded as the US session progressed. We track close to 7.0360 in early Wednesday dealings (after a 0.10% gain for Tuesday). Broader USD/CNH downside technical risks prevail for the pair, with focus likely to remain on whether we can test 7.00 before year end. Broader USD indices remained softer, the BBDXY off around 0.10%, albeit in a volatile session as the market digested US jobs data. USD/CNY spot finished up at 7.0426, while the CNY CFETS basket tracker edged down a little to 97.64 (which is more in line with recent broader USD softness). 

• In terms of topside resistance in USD/CNH, the 20-day EMA is near 7.0665/70, while we had a number of highs around the 7.0700/7.0800 region in the first part of Dec as well.
• US-CH yield differentials have edged lower in recent sessions but remain within recent ranges., the 2yr spread around +208bps. CNH gains continue to diverge from relative China equity underperformance but the market is more focused on yuan appreciation trends to address strong external balances.
• The local data calendar only has FDI for Nov on tap (out today or tomorrow per BBG).
• Focus will remain on the USD/CNY fix for any fresh signs of more meaningful pushback on appreciation pressures.