A$ Outperforms Post Local Data Beats, AUD/JPY To Fresh highs Since 1991

Dollar trends have been mixed in the first part of Wednesday trade. The A$ has outperformed following better local data, while safe havens are marginally weaker. The BBDXY USD index sits little changed, last near 1269.4.

• For AUD/USD we had better than expected May retail sales and building approvals data. This has supported local yields, with benchmark government yield around 2-3bps higher. RBA hike odds for August have risen, although we remain below last week's highs.
• AUD/USD is right on session highs near 0.6680, with upside focus likely to rest on the 0.6700 level. AUD/JPY hit fresh highs back to 1991, the pair last near 107.95, right on session highs.
• NZD/USD has firmed a touch but continues to lag the A$. NZD/USD was last near 0.6080, while the AUD/NZD cross is pressing towards a 1.1000 test.
• USD/JPY remains within recent ranges but has been supported on dips, the pair last near 161.65.
• In the cross asset space, regional equity markets are higher, which has helped the AUD at the margins, although mainland China indices are lagging. US yields are relatively steady, with moves not stretching beyond 1bps in either direction so far today.
• Looking ahead, we have more central bank speak from the US Fed and ECB at the Sintra conference. In terms of data, US June Challenger job cuts/ADP employment, services ISM/PMI, May final durable orders, trade balance, jobless claims and June FOMC minutes are released. There are also June European services/composite PMIs and May euro area PPI data.