Eyeing Thursday Session Highs

AUD/USD is on the front foot, currently tracking +0.15% above NY closing levels. This puts us in the 0.7125/0.7130 range. Recall we couldn't sustain a move above 0.7140 during the NY session, which was fresh highs back to June last year. This level could be in focus if we see further upside momentum today. Dips below 0.7100 were supported on the downside.

• Spill over from a firmer yen is evident, post the Tokyo CPI beat. AUD/JPY is still lower though, last near 92.50, with JPY the best performer so far today in the G10 space.
• Australian PPI data for Q4 showed a modest deceleration to 5.8% y/y (from 6.4%). Trade prices were -0.9% q/q for exports (-1.3% expected), while import prices were +1.8% (+1.3% forecast).
• US equity futures are down, weighed by Intel's disappointing earnings update, although we are away from worst levels (S&P futures last around -0.20%, Nasdaq -0.40%). This isn't spilling to broader risk appetite though, at least at this stage.
• Yield differentials are mostly firmer against the US. The 10yr spread at +6bps for the 10yr tenor, -104bps for the 2yr space (we were -125bps prior to the AU CPI print on Wednesday).
• Next week retail sales data on Tuesday will be the main focus point in the first part of the week.