A$ Builds On Break Above 0.6700, Firmer Metals Aid Higher Local Yields

AUD/USD was firmer post the Asia close on Thursday, although we couldn't breach intra-session highs from Wednesday. We track near 0.6730 in early Friday dealings, after posting a +0.30% gain in Thursday trade, albeit with a US session lighter on in liquidity terms due to the July 4 holiday. The AUD was the best G10 performer as has been the case for much of the past week.

• AU-US yield differentials hold close to multi month highs following the recent round data outcomes which have been skewed in the AUD's favor.
• Broader USD sentiment was mostly on the backfoot, with the BBDXY down a further 0.26%, to the low 1262 region, which was sub Wednesday lows.
• For AUD/USD, focus remains on consolidating the recent range break higher above 0.6700. We are close to Wednesday highs of 0.6734, while early Jan highs rest at 0.6771 and 0.6839 respectively. On the downside, the 20-day EMA is back near 0.6653.
• In the cross asset space, EU equity sentiment was positive. Headlines crossed that Le Pen's National Rally is likely to fall short of an absolute majority, based off polls (per BBG). The second round of the election is on Sunday.
• Commodities were mostly higher, with copper up 0.65%, its fifth straight gain, while iron ore has also risen for five straight sessions, last around $113/ton.
• AUD/JPY sits close to recent highs near 108.50, while the AUD/NZD cross is very close to the 1.1000 handle. AUD/GBP is near 0.5270/75, with exit polls from the UK election pointing to a large Labour win. GBP/USD is relatively steady at this stage near 1.2760.
• The local data calendar just has FX reserves on tap today.