AUSSIE 10-YEAR TECHS: (U5) Recovers From Its Recent Lows
- 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: 95.805/960 - High Aug 8 / High Apr 7
- PRICE: 95.705 @ 19:55 BST Aug 29
- 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: 94.720 - 1.0% 10-dma envelope
Aussie 10-yr futures have recovered from their recent lows. To the upside, the next resistance is at 96.207, a Fibonacci retracement point. Initial near-term resistance is seen at 95.805, the Aug 4 high. A break of this hurdle would be a bullish development. 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.
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FED: Powell - Really Hard To Say Whether Will Have Enough Info To Cut In Sept
On that note, Powell says it's "really hard to say" whether there will be enough information to cut in September. Asked about the what the Fed is looking for in the data:
- "If you saw that the risks to the two goals were moving into balance, if they were fully in balance, that would imply that you should move toward a more neutral stance on policy. This is the special situation we are in, which is, we have two-sided risks... When we paused, inflation was above target and the labor market was pretty good.... As the two targets get back into balance, you would think you would move it in a way closer to neutral and the next steps that we take are likely to be in that direction.
- What will it take? It will be the totality of the evidence. As I mentioned, there's quite a lot of data coming in which before the next meeting, will it be dispositive of that? You know, it's really hard to say. We don't make those decisions right now. So, we will have to see."
US TSYS: Late Chairman Powell Presser React
- Treasury futures are extending lows now, curves bear flattening as projected rate cuts into year end continue to cool.
- Futures extending past this morning's ADP/GDP/Core-PCE lows: Sep'25 10Y futures currently trades -12 at 110-31.5 (110-31 low, 111-14.5 high). Key support is 110-08+, the Jul 14 and 16 low. Clearance of this level would reinstate a bearish theme. First support is at 110-19+, the Jul 24 low.
- Curves shift to flatter: 2s10s -1.814 at 43.131, 5s30s -1.397 at 94.131.
- Cross asset: Stocks retreating (SPX eminis -26.0 at 6380.25), Gold weaker at 3279.0, Bbg US$ index remains bid: 1218.77 (+8.79).
FED: Powell Implies A Fairly Extended Timeline For Tariff Clarity
Powell's commentary today on tariff passthrough to inflation continues to suggest a fairly extended timeline to achieve clarity:
- "What we see now is basically the very beginnings of whatever the effects turn out to be on goods inflation. And you know, I'll say again, they may be less than than people estimate, or more than people estimate. They're not going to be zero."
- And yet, "Inflation, we were very close to 2%. We're seeing some goods inflation move us away, but so far, not very far away."
