A$ Underperforming, Ignores Better Trade Surplus Result

AUD/USD is the weakest performer with the G10 space so far today dipping below 0.6330. The pair is off a further 0.35% from the NY close, although NZD is not far behind, down 0.25%. Outside of the 0.6300 figure level, some support could emerge at Oct 24 lows around the 0.6270/80 region. On the topside note the 20-day EMA comes in at 0.6389.

• There hasn't been any positive follow through from better than expected trade figures. The September trade surplus rose to A$12.4bn, versus A$8.75bn expected. Imports were flat (against +3% expected), while exports rose more than forecast (+7%, versus +1% expected) More details to follow.
• The weaker regional equity tone, lower US futures is likely weighing. AUD/JPY is off by close to 0.50%, last just under 93.50.
• Although as we noted earlier yield differentials have had a stronger AUD/USD correlation this past week.
• AU bond yields have opened up higher this morning (2yr +11bps 3.375%), but this is unlikely to arrest the trend of yield momentum in favour of the USD (note no UST cash trading is taking place due to Japan markets being out).