A$ Underperforms In G10 Space, Amid Renewed China Property Headwinds

AUD/USD sits close to session lows, the pair last 0.6425/30 (lows at 0.6422), around 0.20% down on Friday NY closing levels. We remain above recent lows, with dips in recent weeks into the 0.6380/0.6400 region supported.

• A$ losses are reflective of renewed weakness in the HK/China equity space. This has unwound some of the bounce we saw on Friday. Fresh property concerns have weighed, with a Bloomberg gauge for the sector dipping 6%, the most since Dec 2022.
• This has weighed on iron ore, with the active futures contract near $117/ton, not too far off recent lows.
• Some offset is coming from the better US equity futures tone (Eminis +0.25%), but AUD/JPY is still lower at this stage. The pair last near 95.30/35, still comfortably above early Friday levels from last week around 94.55.
• The local data calendar is quiet until Wednesday when August monthly CPI prints. RBA Assistance Governor Jones is on a panel session which kicks off 05:00 BST.
• AU-US yield differentials sit above recent lows, more so at the front end, with the 2yr spread last near -107bps (-120bps being recent lows).