A$ Holding Near Recent Highs

AUD/USD is tracking slightly higher in early trade today, up above 0.7050, after closing at 0.7040 at the end of last week. Dips back to the low 0.7000 region are still supported.

• The Labor Party is on track to win an outright majority in the Federal election according to several newswires. Counting is still continuing, but risks of a hung parliament have certainly receded. There appeared to be some risk of this late last week, which weighed on AUD relative to broader risk appetite.
• Cross asset signals were mixed, with US shares flat, although tech finished slightly down on Friday. Futures this morning are in positive territory though.
• Commodities were down slightly, but base metals outperformed slightly. Copper was flat for the session, but rose 2.4% last week. Iron ore is back above $130/tonne, comfortably above last weeks lows.
• Yield spreads were relatively steady with the USD.
• There is no data out today, but RBA Assistant Governor Kent will speak at the KangaNews DCM Summit this morning (9:05am AEST). The speech will be on "From QE to QT – The next phase in the Reserve Bank's Bond Purchase Program –"
• Technical studies suggest near term momentum remains positive, after last week's breach of the 0.7054 level (the May 11 high). An extension higher would strengthen the current bull cycle and signal potential for a climb towards the 50-day EMA at 0.7187.