AUD/USD Targeting Break Of 0.6700 Post Data Misses

AUD/USD is weaker following the headline data misses, slipping to 0.6700. We have stabilized somewhat (last around 0.6705) as this region has proven to be a support point this week. Focus remains on the downside though. A clean break of 0.6700 paves the way for 0.6664 (50% retracement of the Oct-Feb bull cycle), while the Dec 20 low sits at 0.6629.

• Not surprisingly we are seeing AU yields under pressure. The AU-US 2yr spread is back to -128bps, near early Feb lows and 10bps wider for the session.
• The AUD/NZD cross continues to correct lower, now back to late Jan levels, last near 1.0860/65.
• Q4 Q/Q GDP was weaker than expected at 0.5%, (forecast 0.8%), although Q3 was revised up a touch to 0.7% (form 0.6%). Jan CPI was much weaker than expected +7.4% y/y, versus 8.1% forecast (prior was 8.4%).