AUD & JPY Marginally Higher, Amid Tight Ranges, US PCE Coming Up

The BBDXY USD index is marginally down for the first part of Friday trade, last 1256.5. All of the majors are up against the dollar, with JPY and AUD outperforming at the margins.

• USD/JPY hasn't spent too much time out of the 153.50-154.00 range, with an option expiry at 154.00 strike (for NY cut later) potentially influence spot. Yen remains comfortably the best performer in the G10 space in the past week.
• Risk off in the equity space, slumping metal prices (which has contributed to AUD/JPY losses) along with Fed expectations have all aided the yen.
• Post Thursday's Q2 GDP beat we did see front end Tsy yields stabilize somewhat. This comes ahead of this evening's US PCE inflation print.
• This may be leaving market participants somewhat on the sidelines, particularly after the volatility this week.
• The Tokyo July CPI print was mixed, although is unlikely to shift BoJ thinking greatly.
• AUD/USD has firmed back to 0.6550, aided at the margin by a better tone to copper and iron ore prices, although we sit away from best levels. China equity sentiment has mostly seen upticks sold as well.
• NZD/USD has lagged the A$, the pair last near 0.5890. The ANZ consumer sentiment measure rebounded but this reflected easing rate expectations.
• US equity futures are tracking higher, lending some support to higher beta plays, although they aren't outperforming the JPY at this stage. US yields are close to flat.
• Outside of the US PCE print, the Friday calendar is light.