January 31, 2023 03:37 GMT
AUD/USD Unwinds Post CPI Gains
AUD/USD is tracking lower, last under 0.7040, which is near levels that prevailed prior to last week's CPI print. The currency is the weakest performer in the G10 space, although only down 0.30% versus NY closing levels.
- The better than expected China PMI data didn't have a lasting impact on sentiment. The earlier retail sales miss has likely weighed on yield differentials, with the 2yr government bond spread with the US now -114bps, -5bps lower for the session. The proximity of the Fed decision may also be driving some cautiousness.
- There is a little risk aversion creeping into the equity space as well, with US futures back in the red, while China and HK bourses are also tracking lower.
- Metal commodities have moved off recent highs, although more so for copper than iron ore.