A$ Maintains Recent Ranges, Outperforms Against Safe Havens

AUD/USD was supported for the most part post the Asia close on Friday, albeit with some degree of volatility. We briefly dipped sub 0.6800, before tracking as high as 0.6875. We closed around 0.6860, but have lost ground in early trade today, back below 0.6850.

• Cross asset signals were mixed. US equities finished down slightly, although the VIX still ended sub 25. This is the lowest closing level since early June and helped A$ outperformance on crosses through the NY session. AUD/JPY rebounded towards 93.50 and we currently track just under 93.20.
• US yields stayed on the front foot, following a solid NFP report. The 2yr back above 3.10%. This should keep AU-US 2yr spreads around recent lows, around -40 to -50bps.
• Commodities were softer in terms of copper (-1.4%) and iron ore (-0.55%). Oil and coal were firmer though. The aggregate Bloomberg commodity index, rose just under 0.7% for Friday's session.
• Commodity sentiment may be tested further today though, as weekend developments around China's covid situation (in both Shanghai and Macau) may weigh in the early part of this week.
• The data calendar is quiet today. Tomorrow delivers the CBA household spending measure, along with Westpac consumer confidence and NAB business conditions/confidence.
• From a technical standpoint, the backdrop for the currency remains bearish. Support is seen at 0.6762, the July 5/6 low, while on the topside, resistance is at 0.6916/0.6964, the 20-day EMA and high from June 28th respectively.