BOBL TECHS: (H6) Trend Condition Is Oversold

• RES 4: 130.59 High Oct 17 and the bull trigger
• RES 3: 130.07 High Oct 24
• RES 2: 129.73 High Oct 28
• RES 1: 129.33 20-day EMA     
• PRICE: 128.82 @ 05:44 GMT Nov 10 
• SUP 1: 128.70 Low Oct 10     
• SUP 2: 128.52 76.4% retracement of the Sep 25 - Oct 17 bull leg
• SUP 3: 128.25 Low Oct 7
• SUP 4: 127.88 Low Sep 25 and key support  

A short-term bear cycle in Bund futures remains intact and the contract is trading lower this morning. The move down undermines a recent bear theme and the contract has cleared a number of important support points. The 50-day EMA, at 129.14, has been cleared and price is through 128.92, the 61.8% retracement of the Sep 25 - Oct 17 bull leg. Sights are on 128.2, the 76.4% retracement. Resistance is at 129.33, the 20-day EMA.

AUD/JPY sits just off session highs (100.56), last near 100.45, as we approach the London crossover. Multiple supports in play, with risk on tone in equities amid hopes US government shutdown end is within sight the main driver. Higher AU yields another positive, with earlier Hauser remarks around limited spare capacity likely aiding front end AU yields. The initial focus should return back toward 101.50, a break above here is needed for the bullish trend to re-engaged and momentum higher return. Note though, correlations are strongest with global equities, around 94% in levels terms over the past 6 months (the equivalent correlation with AU-JP 2yr yield differentials is around flat over the same period). The initial focus should return back toward 101.50, a break above here is needed for the bullish trend to re-engaged and momentum higher return.

October consumer confidence jumped 5.4% to 121.2, the highest in 6 months but in line with the same time last year. The index fell 1.9% q/q in Q3, pressured by social unrest and economic problems, with real consumption growth moderating slightly to 4.9% y/y from 5%. Sentiment at the start of Q4 suggests that spending could be around 5% again in the quarter possibly supported by the 75bp of easing in H2 2025 to date and an announced moderate fiscal easing in 2026.

• Confidence was supported in October by both economic conditions and expectations which rose 6.2% m/m and 4.8% respectively.
• Concerns over the labour market caused sentiment to decline over H2 and drive protests. This improved in October rising to its highest since May at 102.6 and expectations to 132.0 from 123.1 in September. Current incomes rose to 117.1 from 112.9 while the outlook improved 4.1 points to 138.4.
• Time to buy durable items jumped to 107.5 from 103.2 in September.
• Retail sales growth has held up but auto sales remain very weak. Tourist arrivals have been strong but are now slowing with September up 5.8% y/y after 12.2% y/y in August. 

Indonesia economic outlook improves in October

Source: MNI - Market News/LSEG/Bloomberg Finance L.P.