OIL: Report US-India Deal Close Drives Oil Higher, EIA US Stock Data Out Later

The AUD/USD has had a range of 0.6581 - 0.6604 in the Asia- Pac session, it is currently trading around 0.6595, +0.02%. US stocks initially tried lower on the H-1B visa story but have failed to follow through in our session. The USD retracement continues to grind higher, time will tell how long the reprieve lasts. The AUD/USD should still see dips supported for now with the first buy-zone back towards the 0.6550 area.

• MNI - In today's testimony to the House of Representatives Standing Committee on Economics, RBA Governor Bullock stated that the RBA expects recent interest rate cuts to support household and business spending. Labour market conditions are near full employment, though unemployment has risen slightly since the last meeting, with some tightness remaining. Household consumption growth is expected to continue as real incomes rise. Since the August meeting, domestic data have been broadly in line with or slightly stronger than expectations. The overall economic outlook remains clouded by uncertainty.
• "BULLOCK: RBA GETTING CLOSER TO MISSION ACCOMPLISHED ON CPI, RECENT CHINESE ECONOMIC DATA HAVE NOT BEEN SO GREAT - [RTRS]"
• "RBA'S HUNTER: LOOKS LIKE ECONOMY IS IN A `CYCLICAL UPTURN” - BBG
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6510(AUD356m), 0.6525(AUD705m), 0.6600(AUD546m). Upcoming Close Strikes : 0.6600(AUD703m Sept 24), 0.6650(AUD908m Sept 23), 0.6720(AUD791m Sept 24) - BBG
• CFTC Data last week shows Asset managers started to significantly reduce their shorts, -41095(Last -68333). The Leveraged community has pulled back their shorts to be almost flat, -1519(Last -5081).
• AUD/JPY - Asia-Pac range 97.48 - 97.85, Asia is trading around 97.85.The pair has stalled towards 98.50, dips back towards 96.50/97.00 should be expected to be supported now first up.

Fig 1: AUD CFTC Data

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

The TYZ5 range has been 112-22 to 112-27+ during the Asia-Pacific session. It last changed hands at 112-23, down 0-01 from the previous close. 

• The US 2-year yield has edged higher trading 3.578%, up 0.01 from its close.
• The US 10-year yield is trading around 4.141%, up 0.01 from its close.
• 10-Year Yields could not extend below 4.00% and have bounced as the Fed could not meet the markets very dovish expectations. The first buy-zone is now back towards the 4.20% area where I suspect demand should return initially. A sustained break through 4.00% is needed for the focus to then turn towards the 3.80% area.
• Robin Brooks on X: “Germany's real 10-year yield crossed above 1% this month, the first time it's been here since 2011. This is a destabilizing force for the Euro zone, because it pushes up yields everywhere else, including for highly indebted countries. It's already impacting Spain and France...”
• ISABELNET on X: “LEI - A 0.5% decline in the US Leading Economic Index (LEI) in August 2025 indicates an ongoing slowdown in US economic activity.”
• (Bloomberg) -- Asset-manager net long position in long-bond futures was unwound at a rapid pace in the week to Sept. 16., CFTC data shows. Other bigger positioning shifts saw hedge funds cover shorts in 5-year note futures while asset managers extended net long in ultra-long bond futures.
• Data/Events:  Chicago Fed Nat Activity Index

Fig 1: 10-Year US Yield Daily Chart

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

• Following the daily 7-day OMO, a CNY300bn 140-day reverse repo was issued this morning.  
• The 10-Yr bond future is up +0.195 at 107.95, its biggest jump since August whilst the 10-Yr CGB is down at 1.79%.  
• The gains push the 10-Yr above the 20-day EMA of 107.93.