A$ Bear Cycle Intact, AUD/JPY TO Fresh Lows As Global Equities Falter

AUD/USD tracks near 0.6500 in early Friday dealings. The pair lost 0.63% for Thursday's session, the second worst G10 performer after GBP (which was weighed by a BoE rate cut). Broader G10 trends were risk off with all pairs falling against the USD, except for CHF (+0.57%) and JPY (+0.42%).

• Global equities were weaker across the board, with EU markets down 2.2%, the SPX finished up 1.37% weaker. Softer US data, with the ISM manufacturing missing estimates (46.8 for headline and 43.4 for employment) weighed on sentiment.
• Middle East concerns also weighed on equity sentiment, after Hezbollah said they want to "WANT TO RESPOND IN A REAL WAY, NO THEATRICS" Bbg. This comes after Iran called for retribution against Israel for the killing of political leader Haniyeh. Oil prices still finished lower for Thursday (Brent off 0.81%).
• The sharp move down in US yields didn't benefit AUD/USD (the 10yr Tsy sub 4.00%), as risk off dominated. AUD/JPY was volatile, but tracks at fresh lows near 97.00 in early Friday dealings. This fresh lows back to March of this year
• Metals commodity prices were mostly softer, copper off 2.25% (CMX basis), iron ore down 1.55%.
• For AUD/USD, the July 31 low at 0.6480 isn't too far away (0.6466 is a Fib retracement sub this level). 0.6583, the July 25 high is likely resistance on the upside. A broader bear cycle remains intact.
• On the data front today we have Q2 PPI and housing finance for June, which are unlikely to be market movers.