AUD: AUD/JPY-Dragged Lower By USD/JPY Move, Finds Demand Toward 103.20
The overnight range was 103.19 - 103.77, Asia is currently trading around 103.80. The pair found good demand back towards the 103.00 area after being dragged lower by the move in USD/JPY. On the day watch to see if price can build on this demand and get the momentum to move back above 104.00, if not then we could be in for some consolidation or further reversion back to the mean. Support is seen back toward the 102.90-103.20 area; a break through here could signal a deeper pullback.
- The AUD/JPY Average True Range(ATR) for the last 10 Trading days: 73 Points
Fig 1: AUD/JPY spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
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USD: BBDXY - Tops Out Above 1220 On A Weak ADP Print, Support seen 1210-15
The BBDXY range overnight was 1216.52 - 1220.70, Asia is currently trading around 1218, +0.02%. The USD took another leg lower overnight in reaction to a weaker ADP print. I am caught a little undecided on the USD at the moment, I liked the fade into 1230 initially but short term I expect dips back toward 1210-1215 to now be supported first up. We could chop around sideways for a while while the market decides which way to go. Above 1230 and we could start to break higher, below 1205 and the downtrends momentum could be re-engaged. Short-term while the 12221/22 area caps price my bias would be for a test toward the 1210-1215 support.
- Bloomberg: “The dollar weakened after the ADP employment data indicated a decline in private sector jobs. The weekly ADP jobs figure showed a loss of 11,250 private sector jobs on average in the month through Oct. 25.”
- MNI INTERVIEW: Fed's Risk Management Cuts Not Enough - Revelio. The U.S. labor market will continue to soften and the Federal Reserve's 50 basis points of interest rate easing so far this year will not be enough to shore up hiring, private data provider Revelio Labs’ chief economist Lisa Simon told MNI.
Fig 1: BBDXY Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
AUSSIE BONDS: ACGB Dec-35 Supply Digested With More Demand
Expectations of sustained strong pricing at auctions proved accurate, with the latest round of ACGB Dec-35 supply seeing the weighted-average yield print 0.32bp through the prevailing mids (per Yieldbroker).
- Moreover, today’s cover ratio jumped dramatically to 3.4875x from 2.1583x.
- As noted in our auction preview, the current outright yield was around 10bps higher than at the time of the previous auction but approximately 40bps lower than the peak in late 2024.
- On the other hand, the 3/10 yield curve was around 10bps flatter than the previous auction level and sat around 50bps below its recent high.
- Post-auction, the ACGB December 2035 cash line is trading slightly cheaper.
AUSSIE BONDS: ACGB Dec-35 Auction Result
The AOFM sells A$1200mn of the 4.25% 21 December 2035 bond:
- Average Yield (%): 4.3643 (prev. 4.2384)
- High Yield (%): 4.3650 (prev. 4.2400)
- Bid/Cover: 3.4875x (prev. 2.1583x)
- Allotted at Highest Accepted Yld as % of Bid at that Yld (%): 76.1 (prev. 66.1)
- Bidders: 35 (prev. 22), 10 (prev. 13) successful, 3 (prev. 5) allocated in full
