A$ Consolidates After Early Dip

AUD/USD is recovering modestly from the earlier dip towards 0.6950. The pair was last at 0.6965, which is still around 0.20% below NY closing levels. At the margin the A$ is underperforming the rest of the G10, with the exception of NZD. AUD/NZD weakness back to 1.1200 was supported and the pair is now tracking to fresh highs at 1.1225.

• AUD/JPY is holding close to opening levels at 95.25 (after a dip towards 95.00), while AUD/EUR has moved away from the 0.7000 level for now (last at 0.6985/90).
• AUD/USD lows came just before the CNY fixing, which was again stronger than expected, although this print hasn't seen much follow through gains in CNH (USD/CNH tracking close to 6.8625 currently).
• In terms of cross asset signals, regional equities are higher, in line with overnight gains. US futures are in the red but away from worst levels (-0.05% for the S&P).
• Commodities are mostly higher, with copper +0.50% to $372 (CMX), while iron ore futures are back to $105/tonne.
• In the yield space, the AU-US 2yr is back around lows for the week (-38bps). The AU 2yr is back sub 3%, -6bps for the session so far, but still around +12bps for the week.