A$ Underperforms Safe Havens

The A$ spent most of the post-Asian close on the back foot. We probed just below 0.7060 before a late recovery in US equity sentiment pushed us back above 0.7100. We open around 0.7110, similar levels to yesterday. The currency underperformed USD weakness against the majors though, particularly the safe havens.

• The S&P500 still finished down 0.80%, but this was still 1.7% better than worst levels on the day. Tech stocks underperformed, while the VIX rose back to 29.50%.
• Iron ore and copper have moved off their recent highs. The Bloomberg base metals sub index fell by 1.7%. Oil and gold held up better.
• US yields sank on weaker business survey and housing data, compressing yield differentials, although this benefited the safe havens more so than AUD.
• Today, Q1 construction work done prints, with market expectations for a 1.0% rise, following last quarter's -0.40% fall. RBA Assistant Governor Ellis also speaks at 9:45am AEST. The title of the speech is "Housing in the Endemic Phase ".
• From a technical standpoint, AUD/USD maintains a firmer short-term tone. Resistance at 0.7054, May 11 high, has been cleared. A continuation higher would strengthen the current bull cycle and open the 50-day EMA at 0.7178. The bear trigger is unchanged at 0.6829, the May 12 low. Initial firm support to watch is at 0.6950, the May 18 low.