Aussie Trims Gains Into COB, Fresh Round Of RBA Rhetoric Eyed

AUD/USD trimmed its earlier gains late doors Monday, as the risk backdrop deteriorated, with U.S. equity benchmarks slipping into negative territory.

• U.S. equity space was weighed on by Apple's plan to slow hiring and spending next year in anticipation of a potential economic downturn. Meanwhile, the VIX index rebounded from its one-month low.
• A firmer commodity complex may have supported the Aussie dollar, with BBG Base Metal Index recovering from a cyclical low. The rebound may have been driven by supportive measures announced by China, some of which target its beleaguered property sector.
• AUD/USD trades at $0.6810, little changed on the day. A rally above yesterday's high of Jul 18 high of $0.6854 would give bulls a green light for targeting Jul 8 high of $0.6874. Bears look for losses towards Jul 14 low of $0.6682.
• The RBA will publish the minutes from its most recent monetary policy meeting today, with participants on the lookout for any sign of discussions surrounding a larger than (the implemented) 50bp hike at this month’s meeting/trigger points for such a move as we go forwards. Elsewhere, Deputy Governor Bullock will speak on “How are Households Placed for Interest Rate Increases?” Once again, her address will be eyed for any clues when it comes to the trajectory of future tightening and reaction to the most recent data releases (most notably last week’s strong labour market report).