AUD: A$ Off Highs, But Outperforms G10 Amid Higher US Yields, Retail Sales Today

AUD/USD tracks near 0.6915 in early Tuesday dealings, unable to sustain moves above 0.6940 through Monday's session. We had a brief dip sub 0.6900 amid hawkish rhetoric from Fed Chair Powell. Still, the A$ was an outperformer in the G10 space, marginally rising for Monday's session, along with the NZD. For AUD/USD support lies at the Sep 27 low 0.6868, while the 20-day EMA is under 0.6800. 

• Positive spill over was likely from China equity market gains, with the CSI 300 closing above 4000 (up 8.5% yesterday). Onshore China markets are closed until next Tuesday for the National Day holidays.
• Despite such optimism around China stimulus, we still had some metals commodities move away from recent highs, Iron ore back sub $107/ton, while Copper (CMX basis) lost 1%.
• US Tsy yields rose strongly, led by the front end, with the 2yr up 8bps to 3.64%. “This is not a committee that feels like it’s in a hurry to cut rates quickly,” Powell said.
• This weighed more on the likes of JPY, which fell nearly 1%. AUD/JPY is back to 99.30 in early Tuesday dealings. Recent lows come in close to 98.00.
• On the data front today we have the final Sep manufacturing PMI, along with August building approvals and retail sales. The latter is expected to rise 0.4%m/m, from a flat outcome in July.