AUSSIE 10-YEAR TECHS: (U5) Follows Fade in Treasuries

• RES 3: 96.501 - 76.4% of the Mar 14 - Nov 1 ‘23 bear leg
• RES 2: 96.207 - 61.8% of the Mar 14 - Nov 1 ‘23 bear leg
• RES 1: 95.960 - High Apr 7
• PRICE: 95.685 @ 16:52 BST Jul 21
• SUP 1: 95.415/95.300 - Low May 15 / Low Jan 14  
• SUP 2: 95.275 - Low Nov 14  (cont) and a key support
• SUP 3: 94.707 - 1.0% 10-dma envelope

Aussie 10-yr futures traded under pressure for much of last week, keeping prices pressured and within range of the recent pullback lows. Next support undercuts at 95.420 (pierced), the Feb 13 low, ahead of 95.275, the Nov 14 low and a key support. Clearance of this level would strengthen a bearish condition. To the upside, a recovery of recent losses would shift attention to resistance at 96.207, a Fibonacci retracement point.

TYU5 reopens at 111-04, down 0-02 from closing levels in today’s Asia-Pac session.

• Overnight the US 10-year yield had a range of 4.3499% - 4.4215%, closing around 4.377%. 
• Treasury yields ended broadly lower overnight; led by the long-end which saw the yields curve flatten(2s10s -2.93 at 51.287, 5s30s -1.46 at 102.453).
• FED: MNI INTERVIEW: Powell Would Win In Court If Trump Fires Him. Federal Reserve Chair Jerome Powell would likely prevail in court and get to serve out his term even if President Donald Trump goes through with threats of firing him, former Fed lawyer Cornelius Hurley told MNI. “Powell has said he’s not going. He would go immediately to court and ask for an injunction or restraining order or stay on the executive order, or however Trump articulated that action, and I think it's a high probability that the court would grant that stay,” said Hurley.
• US DATA: Leading Economic Indicators Continue To Point To Weak Industrial Growth. June's Conference Board US Leading Economic Index (LEI) fell by 0.3% M/M as expected in June, pulling back from 0.0% prior (upward rev from -0.1%). This index has been negative the vast majority of the time for the last few years despite solid economic growth measured by GDP, so we take its signal of outright economic dynamics with some skepticism.
• The 10-year yield has moved back towards its pivot within the wider range 4.10% - 4.65%, expect supply around 4.35% first up.

Fig 1: 10-Year US Yield 120min Chart

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

The AUD/USD had a range overnight of 0.6506- 0.6538, Asia is trading around 0.6525. The pair drifted higher as the USD came back under pressure with US yields pushing lower. The follow through below 0.6500 was quite disappointing for AUD shorts but with Stocks making new highs and risk outperforming, it makes it a hard environment for AUD/USD to collapse in. The Pair looks to be consolidating in a 0.6450 - 0.6600 range as the market awaits a catalyst to provide clearer direction.

• (Bloomberg) -- Australia will begin publishing a complete monthly measure of inflation from Nov. 26, addressing a long-standing gap in the nation’s economic data.
• “US inbound container volume fell for a second month in June, a private gauge showed, putting the indicator on course for one of the sharpest year-on-year reversals amid tariff disruptions. Spot rates for containers from China have fallen for five straight weeks, according to Drewry.” - BBG
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6550(AUD596m), 0.6500(AUD496m) . Upcoming Close Strikes : none - BBG
• CFTC Data shows Asset managers have maintained their shorts -38267, the Leveraged community added slightly to their shorts to -20048.
• Data/Event: RBA Minutes

Fig 1: AUD/USD spot 120min Chart

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