Muted Open, Employment Data Headlines the Week

AUD/USD prints $0.6791, little changed from Friday's closing levels in a muted start to Monday trading.

• On Friday US PPI data surprised to the upside resulting in broad USD strength in the aftermath of the release, with AUD/USD offered before finding support at $0.6744.
• Despite the initial USD surge, the AUD pared its losses vs. the greenback, aided by a softer inflation component within the U.S. UMich survey to rally ~1% before finding resistance at $0.6812.
• The Federal Govt announced a plan to deal with rising energy costs on Friday, capping gas and coal prices as well as funding reductions in energy bills for vulnerable households, although the fiscal burden of the package is limited, which limited any feedthrough into AUD.
• S&P futures went out just above their lows on Friday, comfortably below unchanged levels on the day, while the AU/U.S. 2-Year spread narrowed and iron ore consolidated recent gains, leading to mixed cross-asset impetus.
• The AUD/USD trend remains bullish, bulls target $0.6851, the Dec 5 high and bull trigger. A break through there would open the way to the Aug 30 high at $0.6956. Bears target a break of the 50-day EMA at $0.6641 to re-establish the downtrend.
• The domestic highlight this week is November's labor market report (due Thursday).