A$ Lower As Weaker EUR Offsets US Data Misses

AUD/USD mostly stayed on the back foot post the Asia close on Thursday. We did have a brief pop higher to 0.6675, post weaker than expected US PPI and higher initial jobless claims data. However, there was no follow through, and we track near 0.6640 in early Friday trade. The currency lost just over 0.40% for Thursday's session.

• Broader USD sentiment was mostly positive despite the data misses, as EU concerns weighed on Euro related assets. EUR/USD fell close to 0.70%, boosting the DXY.
• There was no fresh news catalyst, but the pessimistic theme and uncertainty surrounding French politics clearly pervades - while not new news, Macron's approval rating falling to a fresh six-year low (24% according to the latest poll published in Les Echos) added to the weight.
• These moves dragged AUD/USD lower, with weaker equity sentiment in EU markets also a factor, although US markets finished a touch higher. USD yields were lower across the board, aided by the data and safe haven demand.
• In the commodity space, the aggregate Bloomberg index fell 0.51%, base metals were down 1.27%. Iron ore is higher though, back above $107/ton.
• For AUD/USD, broader tech ranges remain intact. 0.6714, the May 16 high, is the upside focus, on the downside, 0.6576, which is the June 10 low and key short term support.
• The local data is empty today, with focus on next week's RBA decision. In the option expiry space, note the following for NY cut later: $0.6615-20(A$1.2bln), $0.6640-50(A$739mln)
• We also have the BoJ decision today, so be mindful of spill over from yen shifts.