AUD/USD Dips Sub 0.7000 Still Supported, Q2 Wages Data In Focus Today

Post Asia close dips in AUD/USD sub 0.7000 were supported. Lows were around the 0.6990/95 region, and we spent most of the NY session pushing back modestly higher. We currently sit around 0.7020/25. Q2 wages data will be the key domestic focus point in Australia today, although watch for spill over from the RBNZ announcement, particularly on the AUD/NZD cross.

• Equity sentiment was mostly positive in US markets, although gains were modest overall. The VIX index stayed below 20%, but isn't seeing a great deal of fresh downside momentum since the start of the week.
• Still, the equity performance was resilient in the face of higher short term yields (the US 2yr back above 3.25%, +7.5bps for the session). Such a backdrop likely helped the AUD/JPY continue to push higher. The pair couldn't get beyond 94.50, and we currently track around 94.25, which is comfortably above earlier lows in the week of close to 93.00.
• The AUD/NZD cross move higher ran out of steam above 1.1080, settling back in a 1.1060/1.1080 range for the rest of the overnight session. We currently sit at 1.1065/70, note the 50-day MA comes in at 1.1057, and key event risks for this cross today.
• The A$ mostly underperformed the rest of the G10 complex. A softer commodity price backdrop likely not helping. The aggregate Bloomberg index flat in the past 24 hours. Brent crude dipped to $92/bbl (although higher natural gas prices provided some offset), while iron ore is back under $107/tonne. Base metals were slightly firmer though.
• The wages outcome today is expected to deliver Q2 QoQ at 0.8%, versus 0.7% prior. The YoY pace is forecast at 2.7%, versus 2.4% in Q1. The RBNZ meeting is also out, with a 50bps hike expected, although much of the focus will be on forward guidance (see our preview for more details).