A$ Recaptures 0.6600 Handle, As Lower US Yields Offset Weaker Commodities

From late Asia Pac lows near 0.6590, AUD/USD steadily recovered. By the NY session we were close to 0.6650, but track slightly lower in early Friday dealings (last near 0.6630/35). Broader USD sentiment was softer amidst a yield pull back, the BBDXY index fell 0.23%. AUD/USD rose 0.35% for Thursday's session.

• A combination of factors pushed US yields lower (cash Tsy benchmarks finishing off -5-7bps). Initial jobless claims were a touch higher than forecast, while Q1 GDP revisions saw lower US core PCE price index data and softer personal consumption. This aided the yield move lower.
• US equity sentiment was still weaker though, off 0.60% for the SPX, while commodity indices fell. The aggregate Bloomberg index off 1.39%, while metals declined 2.20%. Iron ore is back close to $115/ton in terms of the active SGX contract.
• For AUD/USD, lows from Thursday weren't too far off the 50-day EMA at 0.6585. On the topside, 0.6680 is the May 28 high, while 0.6714 (the high from the 16th) is the bull trigger.
• The local data calendar has April private sector credit on tap today (mkt forecast is for a 0.4% rise). Also note the official China PMI prints are due for May.
• Finally, note the following option expiries for NY cut later: $0.6600(A$975mln), $0.6700(A$507mln).