Firmer In Early Trade, China Data Eyed Today

The AUD fell last week by close to 2%, its 6th decline in the last 7 weeks. We ended the week on a better note though, with AUD/USD recapturing the 0.69 handle. We opened this morning a touch weaker but recouped modest losses to sit back above 0.6940.

• Higher US equities helped sentiment post the Asia-close on Friday, while the VIX index closed below 30% for the first time in 7 sessions.
• Commodities were also supportive for the most part, although oil was the main source of strength, base metals up modestly while iron ore tracked sideways. Base metals were still down 4.90% for the week, their 7th straight weekly fall.
• There is no domestic data events today. China events could influence though, today we have monthly activity prints and the latest round of 1-yr MLF rate operations. Over the weekend China authorities cut mortgage rates for some home buyers. while there was also confirmation that Shanghai will also gradually re-open some businesses from today.
• The AU calendar swings into gear tomorrow, with RBA minutes, followed by wages data on Wednesday and jobs figures on Thursday.
• The technical studies for AUD/USD remain bearish. Resistance at 0.6953 (the May 12 high) could be an early focus point. Beyond that there is 0.7054, the May 11 high, while on the downside support comes in at 0.6829.