AUSSIE 10-YEAR TECHS: (Z5) Bull Cycle Remains Intact
- RES 3: 95.995 - 1.618 proj of the Sep 3 - 9 - 10 price swing
- RES 2: 95.865 - 1.000 proj of the Sep 3 - 9 - 10 price swing
- RES 1: 95.780 - High Sep 12
- PRICE: 95.730 @ 20:12 BST Sep 18
- SUP 1: 95.510 - Low Sep 3
- SUP 2: 95.415/95.300 - Low May 15 / Low Jan 14
- SUP 3: 95.275 - Low Nov 14 (cont) and a key support
A short-term bull cycle in Aussie 10-yr futures remains in play. Near-term resistance to watch is last week’s 95.780 high on Sep 12. A clear break of this level would signal scope for a continuation higher and pave the way for a climb towards 95.865, a Fibonacci projection. On the downside, key short-term support has been defined at 95.510, the Sep 3 low. Clearance of this level would instead be bearish.
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US TSYS: Early Support From Soft US Build Permits & Canadian CPI Data
- Treasuries look to finish near late Tuesday session highs (TYU5 +8.5 at 111-25), curves bull flattening with bonds outperforming (2s10s -2.245 at 54.607, 5s30s -.571 at 107.952).
- Rates rebounded after this morning's data - lower than expected build permits outweighing higher than expected housing starts, while softer Canadian CPI aggregates added to support.
- Housing starts were far stronger than expected in July at 1428k (saar, cons 1297k) after an upward revised 1358k (initial 1321k) in June. It left starts rising 5.2% M/M (cons -1.8%) after a stronger than first thought 5.9% (initial 4.6%) as they bounced after a -8.3% M/M decline in May (also revised from -9.7%).
- Canadian all-items CPI rose 1.73% Y/Y unrounded (1.86% prior, 1.8% expected by MNI median), and 0.12% M/M (0.18% prior, 0.4% expected).
- US$ rising to one week highs, price action was assisted by a dip lower for the major equity benchmarks, as a cautious risk off mood prevails given the lack of progress regarding a Russia/Ukraine ceasefire and the notable weakness for tech stocks in the US.
- Stocks in retreat (Nasdaq -323.04 at 21306.66) ahead of Wednesday's July FOMC minutes not to mention Friday's annual economic symposium in Jackson Hole Wyoming.
AUDUSD TECHS: Trend Signals Remain Bullish
- RES 4: 0.6700 76.4% retracement of the Sep 30 ‘24 - Apr 9 bear leg
- RES 3: 0.6688 High Nov 7 ‘24
- RES 2: 0.6677 0.764 proj of the Jun 23 - Jul 11 - 17 price swing
- RES 1: 0.6569/6625 High Aug 14 / 24 and the bull trigger
- PRICE: 0.6461 @ 16:32 BST Aug 19
- SUP 1: 0.6419 Low Aug 1 and a bear trigger
- SUP 2: 0.6373 Low Jun 23
- SUP 3: 0.6354 38.2% retracement of the Apr 9 - Jul 24 upleg
- SUP 4: 0.6323 Low Apr 16
AUDUSD is off its most recent highs but continues to trade in a range. From a trend perspective, the condition remains bullish highlighted by MA studies that remain in a bull-mode position. Key resistance to monitor, has been defined at 0.6625, the Jul 24 high. Clearance of this level would confirm a resumption of the uptrend and open 0.6677, a Fibonacci projection. On the downside, key support to watch lies at 0.6419, the Aug 1 low.
US TSYS: Late SOFR/Treasury Option Roundup: Paired as Underlying Rises
SOFR and Treasury options traded a little more evenly between calls & puts Tuesday after better SOFR call interest in the first half. Underlying futures trading near late session highs helped projected rate cut pricing gain some traction vs. early morning (*) levels: Sep'25 at -21.7bp (-20.9bp), Oct'25 at -35.1bp (-34.1bp), Dec'25 at -54.4bp (-53.5bp), Jan'26 at -65.6bp (-64.1bp).
- SOFR Options:
- +10,000 SFRU5 95.81 puts, 3.0 vs. 95.9125/0.21%
- 4,400 0QV5 96.56/96.68 put spd vs. 2QV5 96.50/96.62 put spds
- +2,000 SFRU5 95.93/96.00/96.06/96.12 call condors, 0.75
- +2,000 SFRU5 95.75/95.81/95.87 put flys, .37 ref 95.90
- +2,000 SFRU5 96.12/96.25 call spds. .87 ref 95.897
- +4,000 SFRU5 96.00/96.12/96.18 broken call flys, 1.0
- 6,600 SFRX5 96.12/96.25/96.50 call trees ref 96.205
- 2,000 2QZ5 96.12/96.31/96.56 2x3x1 put flys
- 5,000 0QU5 96.50/96.68 put spds ref 96.795
- 3,500 SFRX5 96.12/96.25/96.50 broken call trees ref 96.195
- 2,000 SFRZ5 95.87/96.00 put spds
- 10,000 SFRU5 96.00/96.12 1x2 call spds
- 17,000 SFRU5 96.00/96.12/96.25 call flys ref 95.895 (adds to some +60k traded through Mon at .75)
- (Note: Large late Monday buying in Oct'25 96.50 calls, volume 180,197 saw open interest climb +95,227 to 226,924)
- Treasury Options: (reminder Sep options expire Friday)
- 12,300 wk5 FV 107.5/108 2x1 put spds 1 vs. 108-29/0.05%
- -6,000 TYV5/TYZ5 112 call spds 29
- -5,000 TYV5 110.5/112.5 call over risk reversals, 11 vs. 111-23
- -7,300 FVV5 108.25/109.5 call over risk reversals, 3 vs. 108-28
- 2,000 USU5 117/119 call spds ref 114-07
- +5,000 TYV5 111.5 puts, 45 ref 111-19/0.48%
- 50,000 TYV5 113 calls, 19 ref 111-20
- over 10,200 TYU5 112.5 calls, 2 last
- over 7,800 TYU5 113 calls, 1 last
- over 9,000 TYV5 111 puts, 31 last ref 111-19
- 4,700 TYU5 113 calls, 1 ref 111-19
- 3,900 TUV5 103.75/104.5 strangles ref 104-01.38
- 1,500 TYU5 111.5/111.75 2x3 call spds ref 111-16.5
- 1,250 TUV5 103.5 puts ref 104-01.75
- 1,750 TUV5 103.75 puts ref 104-01.88
