Futures A Touch Below Settlement

The light twist steepening of the U.S. Tsy curve and weakness in EGBs meant that Aussie bond futures lodged modest losses in overnight dealing, although ranges were contained. That leaves YM & XM 1.5 below their respective settlement levels at typing. Bills run flat to 4bp cheaper through the reds.

• XM futures sit ~15bp off cycle lows (located at 96.330), with our technical analyst noting that the drift away from the May highs keeps the primary trend pointed down. MA studies continue to highlight a bearish backdrop and recent weakness has maintained a bearish price sequence of lower lows and lower highs - the definition of a downtrend.
• Note that holidays in the UK, China & Hong Kong may limit wider news flow during today’s Sydney session. Meanwhile, housing finance data and the release of the weekly AOFM issuance slate headline the domestic docket.