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AUSSIE 10-YEAR TECHS

(Z1) Off Lows, But Remains Weak

USDCAD TECHS

Still Vulnerable

AUDUSD TECHS

Bullish Price Sequence

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As China prepares to launch next Friday the southbound leg of the Bond Connect, a scheme that allows domestic investors to access Hong Kong-traded bonds, domestic institutional investors may start with buying yuan-denominated dim sum bonds as well as high-grade U.S. dollar bonds issued by Chinese local governments in Hong Kong, given to the significant differences between domestic and foreign bond markets, Yicai.com reported citing industry insiders. Investors are unlikely to buy high-risk real estate dollar bonds, the newspaper said. The daily quota capped under CNY20 billion is very small, but the opening of the southbound link will encourage domestic investors to buy dollar bonds issued by Chinese companies overseas, which generally have better liquidity and higher yield, the newspaper said.