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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
AUD
AUD/USD is under modest pressure in early trade, falling back below 0.7100. Some drag from a weaker NZD is evident, while US equity futures are off their earlier highs. Correlations between AUD and global equities have come down in recent weeks though.
- The table below presents the correlations between AUD/USD & its traditional key drivers in level terms for the past 5 days and past month.
- The yield spread trend has still moved against AUD, albeit with a good degree of volatility, particularly at the short-end. The correlations with the 2yr spread are back in positive territory over the shorter-term horizon, but remain low in absolute terms.
- Longer dated yield differentials still have negative correlations with the AUD.
- Correlations with commodities are back to recent highs, with broad based commodity performance tracking higher relative to iron ore.
- There has been a step down in correlations between AUD and global equity market performance.
- This fits with the modest wedge between the AUD and global equities that has emerged, see the chart below.
Table 1: AUSD/USD correlations
Source: MNI - Market News/Bloomberg
Fig 1: AUD/USD & Global Equities Performance
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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