AUSSIE 10-YEAR TECHS: (U5) Strong Recovery

TYU5 reopens at 110-28, up 0-01 from closing levels in today’s Asia-Pac session.

• Overnight the US 10-year yield had a range of 4.3770% - 4.4443%, closing around 4.39%. 
• Treasury yields ended lower on the night, led by the long-end causing the yield curve to flatten (2s10s -4.28 at 43.283, 5s30s -2.23 at 89.812).
• US economic data left intact expectations that the Federal Reserve will cut interest rates at least once in 2025
• MNI US DATA: Industrial Output Continues To Stutter After Pre-Tariff Burst. Overall, US industrial output looks to have peaked in Q1 for the time being, reflecting some pulling forward in production and demand ahead of tariff impacts. Most indicators, including durable goods orders and surveys such as ISM Manufacturing, have pointed to a pullback in Q2 in industrial output which looks to be borne out in the data so far.
• MNI US DATA: Redbook Sales Continue To Suggest Steady Slowdown In Core Retail. Johnson Redbook's retail sales index showed a 5.2% Y/Y rise in the week ending Jun 14, up from 4.7% prior and bringing June-to-date sales to 5.0% Y/Y.
• The 10-year yield bounced strongly off its 4.30/35% support, this area needs to hold if yields are to move higher. The range looks to be 4.30% - 4.60% for now a break either side would provide a clearer direction. Lots for the market to digest as things heat up in the middle east and we approach the FOMC.

Bloomberg reported that there was a sharp fall in US oil stocks of 10.1mn barrels last week with 800k at Cushing, according to people familiar with the API data. Gasoline inventories fell 200k while distillate rose 300k. The official EIA data is out later today. 

• RES 3: 97.190 - High May 5 2023
• RES 2: 96.932 - 76.4% of Mar-Nov ‘23 bear leg
• RES 1: 96.860 - High Apr 07
• PRICE: 96.630 @ 15:00 BST Jun 17
• SUP 1: 95.900 - Low Jan 14 
• SUP 2: 95.760 - Low 14 Nov ‘24
• SUP 3: 95.480 - Low Jan 11 2023 and a major support 

Aussie 3-yr futures rallied off lower levels on the recent RBA rate cut and guidance, however prices remain south of the 50-dma for now. The recent rally took out resistance at 96.730, the Sep 17 ‘24 high, however momentum faltered, leaving 96.860 resistance intact. This remains the key level to the upside.  Instead, a continuation lower would strengthen a bearish theme. This would refocus attention on 95.760, the 14 Nov ‘24 low. Conversely, a reversal higher would refocus attention on 96.860, the Apr 7 high.