AUSSIE BONDS: Modestly Cheaper Ahead Of Tomorrow's Jobs Report

TYU6 is dealing at 109-10+, -0-09+ from Thursday's closing levels in today's Asia-Pac session, after parring early weakness.

• Fears that US-Iran negotiations would be derailed by the ongoing Israel-Hezbollah conflict had fueled early weakness.
• Risk appetite has improved following a joint statement from mediators Qatar and Pakistan and comments on X from Iran's foreign minister Araghchi that progress had been made in US-Iran talks and that the technical team would continue to work out details through the week.
• Brent started today reaching $82.30/bbl but then declined to a low of $78.69. It is currently down ~1.5%. August WTI is 0.4% lower at $75.51, off the intraday low at $75.01. It reached $78.14 at the start of trading.
• Cash bonds 2-5bps cheaper in today’s Asia-Pac session after being closed on Friday in observance of the Juneteenth holiday.
• MNI Techs (TYU6): Key short-term resistance to watch is at 110-00, the 50-day EMA and the May 29 high at 110-00+. A clear break of this hurdle would undermine the bear theme and signal scope for a stronger recovery. This would open 110-14, a Fibonacci retracement point. For now, gains are considered corrective. Initial firm support is 108-25, the Jun 8 low. The bear trigger is 108-08+, May 19 low.

Bloomberg Finance LP

ACGBs (YM flat & XM -1.5) are modestly weaker cheaper.

• Risk appetite has improved following a joint statement from mediators Qatar and Pakistan and comments on X from Iran's foreign minister Araghchi that progress had been made in US-Iran talks and that the technical team would continue to work out details through the week.
• Cash ACGBs are flat to 2bps cheaper with AU-US 10-year yield differential at +34bps.
• The bills strip pricing is -1 to -3 across contracts.
• RBA-dated OIS pricing shows tightening across all meetings, with the probability of a 25bp hike rising from 37% for August to 65% by November and 68% by December 2026.  
• Today, the local calendar will see S&P Global PMIs ahead of May CPI on Wednesday.
• Wednesday’s May trimmed mean measure is expected to rise by 0.3% m/m and 3.5% y/y, following increases of 0.3% m/m and 3.4% y/y in April.
• Governor Bullock reiterated at the June press conference that underlying inflation remains the RBA’s primary focus. She also noted that April’s 3.4% trimmed mean outcome was broadly in line with the Bank’s expectations. The RBA’s May forecasts imply trimmed mean inflation of 3.8% y/y in Q2.
• The AOFM plans to sell A$1000mn of the 4.25% 21 October 2036 bond tomorrow.

Bloomberg Finance LP

• RES 4: 127.74 1.00 proj of the May 18 - 29 - Jun 6 price swing  
• RES 3: 127.22 High Mar 10
• RES 2: 127.00 Round number resistance
• RES 1: 126.80 High Jun 17         
• PRICE: 126.11 @ 05:37 BST Jun 22
• SUP 1: 125.92 20-day EMA    
• SUP 2: 124.88 Low Jun 10 / 11 and a key S/T support
• SUP 3: 124.44 76.4% retracement of the May 18 - 29 rally 
• SUP 4: 123.93 Low May 20

For now, the latest pullback in Bund futures is considered corrective. Attention is on resistance at 126.63, the May 29 high and bull trigger. This hurdle has recently been pierced, a clear break of it would strengthen a bullish condition and confirm a resumption of the bull cycle that started May 18. This would open the 127.00 handle initially. Key S/T support lies at 124.88, the Jun 10 and 11 low. Initial support  is 125.92 20-day EMA.