Trial now
AUSSIE 10-YEAR TECHS

(Z1) Off Lows, But Remains Weak

USDCAD TECHS

Still Vulnerable

AUDUSD TECHS

Bullish Price Sequence

Sign up now for free access to this content.

Please enter your details below and select your areas of interest.

TD Securities note that "the 10-Year ACGB yield was 2 standard errors (s.e) below our model estimate on 20 August, which coincided with the 10-Year ACGB yield hitting its recent low. From a model perspective, the subsequent grind higher in the 10-Year ACGB yield and underperformance vs. U.S. 10-Year makes sense."

  • "We expect this move higher in yield has further room to run. Why? 1. Our model estimate points to higher yields and the actual 10-Year has tracked the directionality of the model estimate. 2. The actual 10-Year yield is still closer to levels 2 s.e. below the model estimate (1.16%) than our fair value estimate (1.499%). This means the magnitude of a potential move higher in 10-Year yield exceeds the potential move lower."
  • "In the near term, a China led risk-off episode may flatten the curve. However, the RBA Governor reiterating the Bank is in no rush to normalise policy (anchoring the front end), limited scope for a push lower in 10-Year ACGB yields based on our model and our U.S. team initiating a short 10-Year real rate trade support progressively steeper ACGB and AUD swap curves."