Despite a relatively upbeat NAB business.....>

AUSSIE: Despite a relatively upbeat NAB business survey out of Australia the

AUDUSD moved to session lows, just under 0.7850. The release showed improvements

in both the conditions and confidence metrics, with NAB chief economist Alan

Oster maintaining his view that the Reserve Bank of Australia will deliver the

first hike in its cash rate in August while reiterating that the risk is that

the RBA will move later. While Oster could push back his RBA hike call when NAB

updates its forecasts on the economy on Wednesday, it appears unlikely that he

will. 

- It would seem that the narrowing AU-US yield differential is still managing to

pressure the cross. The 10-year yield spread has operated between 2-3bps for the

most part, as cautious comments from the RBA's Ellis triggered some spread

compression as the Aussie bonds garnered a bid.