AUSSIE BONDS: Cheaper Ahead Of Next Week's RBA Gov. Testimony & CPI Data
ACGBs (YM -5.0 & XM -6.0) are cheaper and at/near session cheaps on a data-light day. * Cash US tsy...
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BUND TECHS: (U5) Bear Threat Still Present
- RES 4: 130.26 High Aug 8
- RES 3: 129.89/130.06 50-day EMA / High Aug 14
- RES 2: 129.58 20-day EMA
- RES 1: 129.18 High Aug 18
- PRICE: 129.10 @ 05:42 BST Aug 20
- SUP 1: 128.64 Low Aug 15
- SUP 2: 128.40 Low Apr 9
- SUP 3: 128.19 Low Mar 27 (cont)
- SUP 4: 127.83 76.4% retracement of the Mar 11 - Apr 7 bull leg (cont)
A bear threat in Bund futures remains present. The contract traded sharply lower Friday resulting in a breach of 128.84, the Jul 25 low and bear trigger. Note that the 129.00 handle marks the base of a broad range and a clear range breakout would strengthen a bearish threat. This would open 128.40 initially, the Apr 9 low. Strength above the 50-day EMA of 129.89, is required to signal a reversal. Resistance at the 20-day EMA is at 129.58.
GOLD: Gold Holds Losses, Fed Speakers & Minutes Later
Gold has been range trading today falling to $3311.6/oz before rising to $3319.59. It is currently 0.1% higher around $3318.8 holding onto Tuesday’s losses driven by steps taken towards a Ukraine truce. With markets hoping Fed Chair Powell will reveal his thinking for the September 17 decision on Friday, they are moving in narrow ranges. US yields are little changed and the USD index is 0.1% higher.
- Silver is down 0.5% to $37.212 off the intraday low of $37.170. A clear break of the 50-day EMA at $37.077 is needed to strengthen the short-term bearish threat. Initial resistance is at $39.655.
- Equities are also generally weaker with the Nikkei down 1.7%, Hang Seng -0.6% and S&P e-mini -0.3%. Oil prices are moderately higher with WTI +0.4% to $61.99/bbl. Copper is up slightly.
- Later the Fed’s Waller and Bostic appear and the July FOMC meeting minutes are published. UK July CPI & PPI, euro area July CPI and German July PPI print. ECB President Lagarde appears on a panel.
STIR: RBNZ-Dated OIS Shunt Softer After RBNZ Decision
RBNZ dated OIS pricing closed 14-23bps softer for meetings beyond August following today’s RBNZ Policy Decision.
- The market had priced 22bps of today’s 25bp cut going into the decision.
- 35bps of cumulative easing is now priced by November 2025 versus 12bps before the decision.
Figure 1: RBNZ Dated OIS Post-RBNZ vs. Pre-RBNZ (%)
Source: Bloomberg Finance LP / MNI
