Can't Hold Above 0.6400

AUD/USD sits at 0.6385/90 in recent dealings. This is a touch below session lows of 0.6382. We are sub Tuesday lows, but focus will be on whether we can move into the 0.6350/60 region, which has signified recent lows. Earlier highs were close to 0.6410.

• Fresh downside in AUD/USD has coincided with HK and China equities moving off earlier highs. Property concerns remain in China markets, with Bloomberg headlines crossing that the Evergrande Chair is being monitored by the police, which has likely added some caution.
• This has tempered earlier optimism when PBoC headlines crossed around policy support and keeping CNY stable. AUD/USD hit session highs not long after these headlines.
• Iron ore is still up from recent lows, last near $115.60/ton.
• The August CPI print locally was as expected at 5.2% y/y. This is a tick up from July reading, but core measures were either stable in y/y terms or eased further.
• The AU-US 10yr government bond yield spread is unchanged around -15bps, but have tightened on a 2yr basis, back close to -100bps.