The A$ continues to trade on the back foot through the early part of the session. We got close to testing the 0.7000 handle but have edged a little higher now (last 0.7010). Still, we are comfortably below overnight lows. Outside of NZD, the AUD is underperforming against the rest of the G10 complex, most notably yen. AUD/JPY dipped to under 93.10 at one stage, but we are now back to 93.25/30.
- Cross asset signals are mostly negative, with US equity futures lower, albeit modestly (-0.10-0.20%), while regional equities are mixed.
- Commodities are mixed, with copper drifting lower (-0.50%) after losing over 1% yesterday. Iron ore has steadied somewhat, back to around $106/tonne, but the metal did lose close to 4% yesterday.
- The AU-US 2yr spread is back to -42bps, but this is where we were late yesterday. We are comfortably away from last week’s highs around -32bps.
- The focus will be on the upcoming RBA monetary policy minutes, which are out in about 40mins. Any hints around the RBA's outlook, particularly given the central bank stated it was not on a pre-set path for rates in its most recent statement, will be in focus. Futures pricing has the policy rate a touch above 3.20% by year end.