AUSSIE 10-YEAR TECHS: (H6) Remains Soft

• 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: 95.160 @ 15:18 GMT Dec 22
• 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.

Aussie bond futures are little changed in the first part of Tuesday dealing. 10yr futures (XM) were last around 95.15, while 3yr (YM) at 95.76 was also little changed versus end Monday levels. This is a modest outperformance trend relative to US Tsy futures softness for Monday's session. Some dovish remarks from Fed Governor Miran (in relation to recent data) didn't impact sentiment much. US Tsy yields finished up around 1-3bps for Monday, led by the front end. ACGB yields are little changed so far today, but this does follow strong gains in yield terms yesterday. Local focus today is on the RBA minutes from the Dec policy meeting outcome. 

• Both 3yr and 10yr futures remain within recent ranges, although the 10yr is closer to recent lows. From a technical standpoint, 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.
• The 3yr outright ACGB yield is close to 4.155% little changed, while the 10yr is just under 4.80% (which is around recent highs for this benchmark). The AU 3/10s curve is steady near +63bps, while the AU-US 10yr differential is holding close to recent highs, last +64bps.
• For the RBA Minutes today, Governor Bullock said in the December press conference that 2026's discussions are likely to be around whether to leave rates at 3.6% or increase them, as the Board is uncomfortable with where inflation currently is. This suggests that the RBA's stance is skewed to the upside. The minutes will be scrutinised for more information around this and the degree of concern about upside inflation risks.
• For the Feb policy meeting the market implied rate is around 3.69%, which has been relatively steady in recent weeks. 

• RES 3: 97.796 - 1.618 proj of the Sep 3 - 12 - 15 price swing
• RES 2: 96.780 - High Jun 26 (cont)
• RES 1: 96.700 - High Sep 12  
• PRICE: 95.745 @ 15:17 GMT Dec 22
• SUP 1: 95.740 - Low Dec 22
• SUP 2: 95.480 - Low 1st Nov ‘23
• SUP 3: 94.932 - 1.0% 10-dma envelope

Prices printed fresh pullback lows to begin the week, prompting the active contract to take out notable support into 95.760 and clear through to new multi-year lows. The slower pricing for additional RBA easing - and partial pricing for a return to rate hikes next year - should keep the front-end of the curve under pressure. This keeps prices well below prior resistance at 96.615, the Sep 12 high, and refocuses attention on 95.480 as the next major support.