AUD/USD Dips Below 0.6800, Down on Crosses

AUD/USD dipped sub 0.6800 and is underperforming on crosses. We touched a low of 0.6794, but we are now back to 0.6810. Weaker commodities and lower US equity futures are offsetting better than expected local data.

• Iron ore futures have slumped in early trade this week, down 5% in Singapore to be back below $110/tonne (last at $109). Oil and gold are also weaker. Weekend China developments re Covid and the property default are weighing.
• US equity futures are also down, off 0.7-0.80% at this stage. This has taken AUD/JPY back below 92.00, last traded at 91.84. Note the Friday night lows were just below 91.50.
• The A$ is also underperforming other majors, although, outside of JPY, they have lost ground against the USD as well.
• Local data was better than expected, home loans up by 1.7% (versus a -2.5% fall expected. The previous month was also revised higher. Building approvals also bounced +9.9% (versus -2.0% expected), although this looks to be driven by the volatile apartment segment. Private sector house approvals fell by -2.7%.
• Also, ANZ job ads rose by 1.4%, versus a revised 1.0% rise last month. Earlier, the Melbourne Institute inflation gauge printed at 0.3% MoM for June, 4.7% YoY.
• Local government yields haven't reacted, although the data is largely second tier. 2yr bond yield remains near its session lows at around 2.38%.