A$ Back Sub 0.6500, Metals Index Close To Recent Lows, RBA Bullock's Testimony Today

AUD/USD was mostly on the back foot post the Asia close on Thursday. By the NY session we were close to 0.6480. In early Friday dealings we are back in the 0.6490/95 region, having lost roughly 0.4% for Thursday's session. Broader USD indices were higher (BBDXY +0.15% for Thursday), although this mainly reflected yen weakness (off 0.75%).

• In terms of technicals, the latest break to fresh cycle lows confirmed a resumption of the downtrend and signals scope for weakness towards 0.6453, the Nov 17 low. Moving average studies are crossing into a bear-mode set-up, strengthening a bearish theme. Key short-term resistance to watch is unchanged at 0.6625, the Jan 30 high.
• USD sentiment was aided a higher US yield backdrop (+2.5/+4.5bps moves across the benchmarks). It was a reasonably quiet session overall, although the 10yr yield (4.15%), isn't too far away from 2024 highs (near 4.20%). Fed speak struck a familiar tone, while IJCs data was close to expected.
• EU equities were higher, while the SPX traded above 5000 for the first time, but is only marginally higher for the session. AUD/JPY tested above 97.00 on Thursday but couldn't sustain these gains.
• The aggregate commodity index was +0.50% higher, aided by a strong oil bounce, although the metals sub index fell 0.83%. The index is back close too late 2023 lows.
• Today we have RBA Governor Bullock's testimony before parliament. Note in the option expiry space the following for NY cut later: $0.6500-10(A$1.2bln), $0.6525(A$551mln).