Off Monday’s Lows, But Focus Remains Lower

AUD/USD sits a handful of pips softer on the session at typing, printing just below $0.7110. The rate recovered from worst levels of the day on Monday, after a fairly limited foray below $0.7100, troughing at $0.7082 as e-minis found some stability in early European dealing. Note that AUD/USD did not revisit early session lows during the latter part of the NY morning, when e-minis looked below their early European low. Yesterday’s low now represents initial technical support, after Monday’s show through the Dec 14 low, while bulls need to take out last week’s high ($0.7224).

• A reminder that Australian PM Morrison has called a snap cabinet meeting, which will be held later today. The cabinet will assess the latest evidence re: the omicron COVID strain, with the following restrictions seemingly up for discussion:
• Mandating the use of face masks in most indoor settings
• A return to working from home if possible
• Whether people should no longer be considered fully vaccinated unless they have had a booster shot
• Various federal and state level officials sounded relatively relaxed re: the variant over the weekend, pointing to a very different set of circumstances in Australia vs. global peers.
• The RBA will also release the minutes from its latest monetary policy decision later today.