AUSSIE 10-YEAR TECHS: (H6) Found Bottom?

• RES 3: 95.982 - 76.4% retracement Sep’24 - Nov’24 downleg
• RES 2: 95.960 - High Apr 7 (cont.)
• RES 1: 95.900 - High Oct 17
• PRICE: 95.250 @ 15:09 GMT Jan 7
• SUP 1: 95.120 - Low Dec 10
• SUP 2: 95.087 - 2.0% Lower Bollinger Band
• SUP 3: 94.276 - 1.0% 10-dma envelope

Aussie 10-yr futures remain well toward the bottom of the recent range, having taken out all major support levels in the process. With 95.275 cleared, prices are pushing to new contract lows, opening vol-band support through 95.087 and into 94.276. Any recoveries need to break back above 95.900 to signal near-term bullish traction.

US Bond futures were stronger across all maturities with the 10-Yr finishing at 112-18+, +08 for the day.  The rally saw TYH6 trade above the 100-day of 112-14+ and 20-day EMA 112-16+ with topside resistance now from the 50-day EMA at 112-19+.  TYH6 has opened lower by -03 at the open to 112-15+ to slip back below the 20-day EMA. 

Cash was strong with yields up to -3.5bps lower at the long end.  

• The 2-Yr was up +0.8bps at 3.474%
• The 5-Yr was down -0.9bps at 3.706%
• The 10-Yr was down -2.4bps at 4.151%
• The 30-Yr was down -3.3bps at 4.833%

Approximately  $32.45B corporate debt issued priced Wednesday, following on from record days Monday, Tuesday as data releases dominated.

• U.S. private sector hiring continued to be choppy through the end of 2025 with both structural changes like demographics and AI integration and cyclical factors at play, as employers added 41,000 jobs in December (ADP Employment Change), recovering from -29k in NOV.

https://www.mnimarkets.com/articles/mni-brief-us-dec-hiring-rebounds-still-choppy-.  p-1767795590735

• November JOLTS report missed for job openings with higher quits and lower layoffs. Openings 7146k, exp 7648k, prior revised down to 7449k
• The BEA clarified its approach to October PCE given the lack of CPI data  -  it will average September and November CPI data for its estimates.
• The delayed October Factory Orders data was roughly in line with expectations with a 1.3% M/M contraction (-1.2% M/M expected, +0.2% prior)
• December's ISM Services report was stronger, the headline PMI index  jumping to a 14-month high 54.4 (52.2 consensus, 52.6 prior).  U.S. services activity is likely to strengthen further after the December pickup as robust consumer spending and lower interest rates contribute to solid demand, ISM chair Steve Miller told MNI Monday.

https://www.mnimarkets.com/articles/mni-interview-ism-services-pmi-will-surpass-55-this-summer-1767811133694

After peaking at 0.6767 during Wednesday’s APAC session, AUDUSD trended lower to be down 0.25% to 0.6721 and a mid-range G10 performer. Aussie was pressured by weaker risk appetite with equities and metals selling off. It is currently around 0.6723 just off yesterday’s intraday low of 0.6717. The USD index rose 0.1% following mixed US data.

• AUDUSD traded above the bull trigger at 0.6728 reinforcing the bullish trend but is currently holding below this level. Initial support is at 0.6670, 20-day EMA.
• The yen was one of the better performers leaving AUDJPY 0.2% lower at 105.36 after reaching 105.94 during APAC trading. It is currently around 105.32.
• AUDNZD was little changed on the day at 1.1643 but off the high at 1.1693. The pair have been trending higher driven by diverging central bank stances and has reached new highs since 2013 this week.
• AUDEUR fell 0.2% to 0.5756 and AUDGBP broke above 0.5000 for the first time since November but finished up only 0.1% at 0.4994.
• Equities were softer with the S&P down 0.3% and Euro Stoxx -0.1%. Copper was down 3.5% and silver -3.8% but iron ore was around $109/t. Oil sold off with Brent -0.4% to $60.44/bbl.
• Today November merchandise trade data are released and Bloomberg consensus is forecasting the surplus to widen to $5bn from $4.4bn.