A$ Softer On Less Favourable Risk Environment, Watch Wages Data

Higher US yields and lower equities weighed on the Aussie. It underperformed the G10 and is down 0.8% against the USD to 0.6854. The USD index finished Tuesday up 0.3% as risk sentiment deteriorated.

• The broader uptrend remains in place for AUDUSD and recent moves are a correction from an overbought position. But attention is on 0.6812, the February 17 low, and then 0.6781. The bull trigger is at 0.7158.
• Aussie was down only 0.1% against the kiwi to 1.1037 as NZD was also hit by the pullback in risk. The RBNZ meets today and is expected to hike rates 50bp. AUDJPY is down 0.3% to 92.52. Aussie was 1.3% weaker against the pound at 0.5660 while it fared better against the euro down 0.4% to 0.6438.
• Equity markets were weaker with the S&P 500 losing 2% and the Eurostoxx -0.5%. VIX rose to 23%. Brent fell 1.25% to $82.80/bbl as global growth concerns weighed on the market. Copper prices rose 2.7% and iron ore is down to $130/t.
• Today locally the Westpac leading index for January prints and then Q4 construction and the important Wage Price Index for Q4. The WPI is expected to rise 1% q/q, in line with Q3, to be up 3.5% y/y.