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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.
AUD
The fallout for AUD/USD from the retails sales miss has proven to be limited. The currency has tracked a very narrow range, not much beyond 0.6980/0.7000. Yield spreads have recovered ground, with the AU-US2yr spread back to -42bps, versus earlier lows of around -50bps.
- Commodity prices have also helped, CMX copper up 1.5%, while iron ore is up to $116/tonne. Onshore steel prices in China are also up +3% on the day. The recovery in China property stocks this afternoon (up +1.1%) has helped, with reports of further help for the sector reported by the FT ($148bn package, which appears higher than figures mentioned earlier in the week).
- The A$ is still underperforming on crosses though, most notably against the yen. This is at odds with where US equity futures sit, see the chart below. As we highlighted earlier in the week the correlation between AUD/JPY and global equities hasn't been that strong in 2022 but is up over the past month.
- AUD/NZD is back sub 1.1150, closing some of the wedge with relative yield differentials.
- Note PPI and private sector credit figures print in Australia tomorrow.
Fig 1: AUD/JPY & US Equity Futures
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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