US TSYS: USTs Take Lead from JGBs, Yields Below Mid Point of 1M Range
USTs have followed the lead of JGBs in thin markets with gains Tuesday ahead of the NFP. Yields are down 1-2bps across the curve with curve movement limited. Bond futures' moves are muted with the 10-Yr up +02 at 112-08.
- The 2-Yr is down -1.2bps at 3.477%
- The 5-Yr is down -1.4bps at 3.732%
- The 10-Yr is down -1.6bps at 4.188%
- The 30-Yr is down -1.9bps at 4.841%
Ahead of the NFP markets get the ADP employment change (prior 7.750k), import / export price index (useful guide for future inflation expectations) and retail sales.
There is a US$90bn 6-week bill auction and a US$58bn 3-Yr bond auction tonight as key focus. Bid to cover on last 3-Yr auction was 2.65x
US yields have shown sensitivity to jobs data of late, making this week's NFP an increasingly important release for the next catalyst for yields.
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AUSSIE 3-YEAR TECHS: (H6) Recovery Mode
- RES 3: 97.796 - 1.618 proj of the Sep 3 - 12 - 15 price swing
- RES 2: 96.780 - High Jun 26 (cont)
- RES 1: 96.700 - High Sep 12
- PRICE: 95.890 @ 16:40 GMT Jan 9
- SUP 1: 95.740 - Low Dec 22
- SUP 2: 95.480 - Low 1st Nov ‘23
- SUP 3: 94.932 - 1.0% 10-dma envelope
Prices bounced again Thursday, supported by strength in global bond markets and a smoother inflation picture at the December CPI print. As such, prices edged further away from recent lows. Nonetheless, slower pricing for additional RBA easing - and partial pricing for a return to rate hikes in 2026 - should keep the front-end of the curve under pressure. This keeps prices well below prior resistance at 96.615, the Sep 12 high, and refocuses attention on 95.480 as the next major support.
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