AUDUSD has recovered from its early..........>

AUSSIE: AUDUSD has recovered from its early selloff to return to broadly flat

for the day at 0.7294. 

- Overcoming the 0.7318 July 20 will be a tough task for the bulls, but they

will take comfort in the fact that real yield spreads vs the US have begun to

head in the Aussie's favour in recent weeks. Given the strong historical

correlation between AUDUSD and 10-year inflation-linked bond spreads between the

two countries, the 10bps shift in Australia's favour over the past week should

provide some support. 

- There is little in the way of news events out of Australia today besides the

issuance of 2037 bonds by the AOFM. The pair is likely to continue to be driven

by EM headline risk.