Antipodean Divergence

Divergence in the Antipodean currencies early on, AUD is the best G10 performer so far with AUD/USD up around 11 pips. Elevated iron ore prices continue to support while markets have one eye on what is expected to be an expansionary budget later today.

• NZD down around 5 pips, ANZ Heavy Truckometer Index fell 1.2% M/M in Apr after a revised 3.0% increase the previous month, while total card spending rose 4.0% after seeing a 2.0% gain in March, retail card spending also rose 4.0%.
• JPY is softer, USD/JPY gaining around 7 pips. The latest NHK poll showed that approval for the Japanese cabinet fell 9pp to 35%. This is in line with recent dynamics in local political polling as the public has repeatedly expressed a preference for cancelling the Tokyo Olympics and showed dissatisfaction with the gov't's handling of the Covid-19 outbreak. There were also reports in Asahi that a Japan wide emergency shouldn't be ruled out. The BoJ summary of opinions were also released and provided no surprises.
• Sterling has stabilised after Monday's stellar performance underpinned by bets surrounding UK internal political situation, earlier UK BRC Sales like-for-like for April came in at 39.6% Y/Y from a prior 20.3%. Elsewhere ECB's Schnable said inflation could overshoot target but the central bank can look through this. GBP and EUR have both gained around 10 pips on the session.