AUD/USD continued to recover post the Asia close, amidst broad USD weakness (DXY is back sub 106.40). The A$ got above 0.7000 (high around 0.7010), before fading late on US equity market weakness. We track around 0.6980/85 currently, comfortably above levels that prevailed prior to the US payrolls print on Friday. The AUD is the best performing G10 currency at the start of this week. AUD/JPY is back at 94.20/25, around +2.2% above Friday's lows.
- From a technical standpoint the backdrop remains bullish in the near term. The 0.7047/0.7053 high from Aug 1/ 61.8% of the Jun 3- July 14 down leg remains an upside target. Beyond that is 0.7069, the June 16th high. Note the 50-day MA comes in at 0.6946, while the August 5th low is at 0.6870.
- The data calendar swings back into gear today, the Westpac-Consumer Confidence print for August, along with the NAB business survey update (for July) are out.
- Consumer sentiment has been on a sharp downtrend since late last year but we remain above 2020 lows (last print was 83.8). Business confidence is also lower (+1 last), but conditions have held up better (+13 last).
- Cross asset signals were mixed, US equities fading late to finish modestly lower, after a strong open. The VIX was basically unchanged at 21.29%.
- Commodities were generally positive across oil and copper (+1% for CMX), but iron ore was steady around recent levels ($111.30/tonne).
- US yields eased, more so at the back end, as the 2/10s continued to invert (-45bps). A lot of focus rests on this week's US CPI print.