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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
AUD/USD has spent much of the session on the front foot. The pair has got back above 0.6900, before selling interest capped the move. We are still about 0.35% above NY closing levels though.
- Early A$ demand related to AUD/NZD cross flows, although this has waned as the session progressed. The cross got to a high of 1.1149, but we are now back at 1.1130/35.
- The currency is still an outperformer in the G10 space though. AUD/JPY got above 94.80, but we are back to 94.60. Note moves above 95.00 have presented a cap for this pair in recent months.
- The A$ is benefiting from some optimism around the China outlook. China equities have bucked the weaker regional trend (and lower US futures) and are higher, with support coming from the earlier LPR cut, which appears to be aimed at the property sector (bigger cut for the 5yr).
- This has also spilled to the commodity space; iron ore futures are around +2% on the day to $103/bbl. The is helping offset the lower oil price move. The chart below is the futures against the Shanghai property sub equity index.
- Yield differentials haven't hurt the AUD either. The 2yr AU-US diff is -29bps, fresh multi-week highs.
Fig 1: Iron Ore Versus Shanghai Property Sub-Index
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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