AUSSIE BONDS: Futures Rally Extends With UST/Oil Move, 10yr Eyes 200-day EMA

TYZ6 is dealing at 104-09+, +0-02+ from closing levels in today's Asia-Pac session.

• Cash bonds finished Monday’s session showing a twist-steepener, with benchmark yields 1bp lower to 4bps higher, after oil-driven volatility.
• The 30-year yield made a fresh cycle high of 5.7017% before finishing at 5.6622%.
• Conflicting reports over whether the Saudi East-West oil pipeline had halted flows, and whether the Yemeni government had taken control of the Bab-el-Mandeb Strait from the Houthis, saw oil prices fluctuate and EGBs / Gilts with them on heavy volumes.
• Limited reaction to US data: September's ISM Services PMI saw a slight dip as expected, to 54.9 (55.0 consensus) from August's 55.4, with softer activity details, stronger employment, and markedly higher price pressures amid apparent supply chain constraints and soaring energy prices.
• S&P Global US services PMI: 58.8 (cons and flash 58.7) in Sep final after 56.5 in Aug; S&P Global US composite PMI: 58.4 (cons 58.3, flash 58.4) in Sep final after 56.0 in Aug.
• Tuesday’s focus turns to French Industrial & Manufacturing Production, Eurozone retail sales, US & Canadian trade balance data as well as speeches from ECB's Zigman, Cipollone (at an MNI event), Fed's Williams, Schmid & Bowman.

Bloomberg Finance LP

"*SAUDI-LED COALITION SAYS DESTROYED SANAA MISSILE LAUNCHER: SPA
*COALITION SAYS DESTROYED MISSILE STORAGE FACILITY IN SAADA: SPA" - BBG

• RES 3: 95.6368 - 76.4% retrace of Oct’ 25 - Jan’ 26 downleg (cont)
• RES 2: 95.472 - 61.8% retrace of Oct’ 25 - Mar’ 26 downleg (cont)
• RES 1: 95.270/95.425 - High Jun 26 / High Mar 2 (cont)
• PRICE: 94.555 @ 16:11 BST Oct 05
• SUP 1: 94.515 - Low Sep 15 & Sep 28
• SUP 2: 94.477 - Lower 3.0% Bollinger Band
• SUP 3: 93.775 - 1.0% 10-dma envelope 

The Aussie 10-yr futures contract has cleared support at 94.875, the Jul 24 low, as well as 94.780, the Mar 23 / 30 low on the continuation chart. The clear break of these levels highlights a resumption of the recent bear leg and signals scope for a deeper retracement. A reversal higher would refocus attention on the bull trigger at 95.270, the Jun 26 high.