A$ Off Monday’s Lows, Watch Retail Sales

AUDUSD found support around 0.6700 before climbing back to 0.6746. It is currently trading around 0.6740. Aussie underperformed the G10 again, only doing better than the yen and kiwi. The USD index fell 0.5% but most of the weakness was against European currencies.

• AUDUSD broke through both the 200-day and 100-day moving averages on Monday at 0.6799 and 0.6730 respectively. This opens up the December low of 0.6629. Initial support is at 0.6698. Technical conditions are not yet oversold.
• Aussie was stable versus the yen and is trading around 91.78. AUDNZD is up 0.1% to 1.0926. AUDEUR is down 0.4% to 0.6352 and AUDGBP is -0.8% to 0.5588.
• Equity markets were higher on Monday after Friday’s sharp drop. The S&P rose 0.3% and the Eurostoxx 1.7%. The VIX was down to 21.1%. After rising on Friday oil prices fell with WTI down 0.8% to $75.70/bbl. Copper rose 1.5% and iron ore is around $123.60/t.
• Today the important retail sales data for January print. There is expected to be some payback from the seasonally-impacted 3.9% decline in December. Consensus is projecting a 1.5% m/m increase. A result significantly weaker than this would signal that tightening to date is impacting household spending. The Q4 balance of payments and January RBA private sector credit are also released.