A$ Outperforms Renewed Risk Aversion

AUD/USD is close to where it started the week yesterday, sitting just under 0.6880 currently. Despite a continuing surge in the USD, support for the pair is evident between 0.6860/70 for now. We got close to 0.6930 overnight but ran out of steam, note the 50-day MA comes in at 0.6919.

• The first trading session for the week continued in similar fashion to the end of last week, on-going USD strength, while the A$ outperformed G10 peers.
• EUR/USD's slump through parity was the main focus point, as energy supply fears/worsening terms of trade outlook weighed. AUD/EUR is back above 0.6900, but remains below earlier August highs, which came in just under 0.6950.
• The weaker tone to major equities didn't impact A$ sentiment that much. AUD/JPY is not too far away from recent highs, last at 94.55. The VIX surged overnight, closing at 23.80%, highs back to the start of the month.
• Core yields continued to push higher, which offset some of the positive impetus for yen from weaker equities.
• Commodities (outside of EU gas/coal) were mixed from an A$ standpoint. Base metals are close to flat on an aggregate basis, while iron ore couldn't hold positive momentum from early yesterday. Futures are back to the low $101/tonne region.
• On the data front today, preliminary PMIs for August print, which are not typically a market mover.