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A$ Cross Gains Moderate

AUD

The A$ has lost ground today, with AUD/USD down 0.4% from opening levels to 0.7200, while gains on crosses have moderated.

  • Yield momentum has certainly eased for the AUD. The AU-US 2yr spread is back into negative territory after touching as highs of +10bps post the RBA yesterday.
  • The 3yr bond yield is back to 3.05%, having rejected a move above 3.15%. This was also the high from early May post the last RBA decision.
  • The AUD/NZD cross is back close too flat levels at just under 1.1150, after trading around 1.1160 earlier.
  • AUD/JPY is back sub 96.00, basically unchanged on the day at 95.90. We did get as high as 96.20 in earlier trade. US equity futures are lower, but away from worst levels (around -0.3% for S&P500).
  • Iron ore has edged away from recent highs and is back sub $144/tonne. This, along with a sharp reversal in China onshore equities has also weighed at the margin.

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