Downtrend Resumes, Watch Upcoming Survey Data

The AUD was the worst performer (-1.2%) in the G10 against the USD, as risk appetite waned on rising geopolitical tensions. Equity markets were also generally lower. The AUDUSD weakened further overnight and is now trading above its lows of 0.6275 at around 0.63.

• All majors were down against the USD except NOK leaving the DXY +0.3% on the day. The risk off move meant that AUDJPY fell to 91.5 and is now trading at 91.79. AUD also underperformed NZD but recovered some of its losses and is now at 1.132.
• The AUDUSD broke through its initial support of 0.6363 and bear trigger, thus confirming the resumption of the primary downtrend. It also went through the next support of 0.6283 (23 April 2020 low) overnight but is now back above it and is the next support to watch.
• There was payback in oil markets (~-2%) after last week’s gains. Brent first reached $98.75 before ending the day about $95.75. Copper prices were higher overnight rising 1.5%. Iron ore was stronger trading in the $97-$98 range on optimism that China would have to rebuild inventories after its holidays.
• There is important Australian data today that could impact the RBA’s thinking. It starts with CBA household spending intentions for September, followed by October Westpac consumer confidence and then finally the September NAB business conditions survey (watch the labour costs and price components).