AUD/USD Rangebound

AUD/USD was range bound post the Asia close, tracking a range of just under 0.6910 to 0.6949. We open this morning around 0.6925. The currency has underperformed the rest of the G10 complex since the start of the week, particularly the EU bloc.

• Cross asset drivers were mixed for the A$. Equities were down in the US, albeit modestly, while the VIX retreated further to sub 27%.
• AUD/JPY stayed in a 93.50-94.00 range post the Asia close, with dips supported. We trade at 93.77 last.
• Yields were mostly higher, although the EU saw slightly stronger moves compared to the US, which helped EUR outperform in the FX space.
• The AU-US 2yr spread recovered some ground late yesterday, from -33bps to -25bps, with the US 2yr yield move overnight unwinding a lot of this improvement.
• Commodities were higher in terms of oil, but iron ore and copper were less positive. After touch $120/tonne yesterday, iron ore futures slipped back to a $117 handle.
• Copper was range bound, holding modestly above last week's lows. An aggregate measure of base metals edged up (+0.83%) after last week's 6.6% fall.
• The data calendar is quiet today, with May retail sales out tomorrow the main focus point.