BOBL TECHS: (U5) Holding On To The Bulk Of This Week’s Gains

• RES 4: 118.030 High Jul 22 and a key resistance   
• RES 3: 117.673 50-day EMA 
• RES 2: 117.579 20-day EMA 
• RES 1: 117.460 High Jul 28       
• PRICE: 117.320 @ 05:49 BST Jul 30 
• SUP 1: 116.970 Low Jul 25 and a bear trigger   
• SUP 2: 116.840 Low Mar 18 (cont)
• SUP 3: 116.800 Low Mar 17 (cont) 
• SUP 4: 116.637 76.4% retracement of the Mar 6 - Apr 7 bull leg (cont)         

Bobl futures traded in a volatile manner last week and pulled back from its Jul 22 high. The contract breached a key support at 117.200, the Jul 11 low, however price has recovered. A bullish candle pattern on Jul 25 and one on Monday - a hammer formation followed by an engulfing signal - highlights a potential base. Initial resistance to watch is 117.579, the 20-day EMA. The bear trigger lies at 116.970, the Jul 25 low.

• As Hong Kong's Stablecoins Ordinance will take effect on Friday, the Hong Kong Monetary Authority issued detailed regulatory guidelines for stablecoin issuers on Tuesday, emphasizing that it will adopt a cautious approach during the early stages of the virtual currency sector's development, and consider easing requirements over time based on market experience.  To streamline the licensing process, the HKMA said firms interested in issuing stablecoins in the city are encouraged to contact the regulator by Aug 31 for initial guidance. Those believing themselves well-prepared and aiming for an early start should submit applications no later than Sept 30.  (source China Daily)
• Chinese Minister of Finance Lan Fo'an pledged on Wednesday to accelerate the implementation of childcare subsidy policy, including gradually rolling out free pre-school education, and providing nursing subsidies for disabled elderly in the country.  The minister emphasized the need to bolster expansion of domestic market demand to further improve economic circulation. This includes combining efforts to improve people's livelihoods with measures to boost domestic consumption, by strengthening elderly and health care services and introducing a national childcare subsidy system to improve social welfare and the households are willing to spend more. (source Global Times)
• China and Hong Kong markets are mixed. The HSI is off 0.40%, while the CSI 300 continues to rally, last up 0.50% to 4170/75. This is fresh highs back to Nov last year for the index. Positive tones around US-China trade talks are likely helping, while the government's efforts to remove excessive competition in certain sectors is also likely being seen as a positive for the profit outlook.
• Yuan Reference Rate at 7.1441 Per USD; Estimate 7.1736
• The 10-year CGB is at 1.73% today, having closed yesterday at 1.74%

ACGBs (YM +5.5 & XM +6.0) are higher, but off the session bests seen immediately after the release of lower-than-expected trimmed mean CPI.

• Australia’s Q2 trimmed mean CPI printed only 0.1pp above the RBA’s May Q2 forecast, which with the economy developing broadly in line with expectations since the July meeting should allow it to ease 25bp on August 12 when it also releases its updated outlook. Trimmed mean rose 0.6% q/q to be up 2.7% y/y, a moderation from Q1’s 0.7% & 2.9%.
• Cash US tsys are slightly cheaper in today's Asia-Pac session after yesterday's strong gains. The focus is on today's FOMC meeting.
• Cash ACGBs are 6bps richer on the day, with the AU-US 10-year yield differential at -6bps.
• The bills strip remains stronger than pre-data levels, with pricing +3 to +6.
• RBA-dated OIS pricing is 3-6bps softer across meetings after the data. A 25bp rate cut in August is given a 99% probability, with a cumulative 64bps of easing priced by year-end (based on an effective cash rate of 3.84%).
• Tomorrow, the local calendar will see Building Approvals, Private Sector Credit and Q2 ToT data alongside a Fireside Chat by RBA Hauser.
• The AOFM plans to sell A$1200mn of the 2.75% 21 June 2035 bond on Friday.