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AUD

Struggles To Break 0.78 Handle

AUSSIE BONDS

Supply & Local Data Due

JPY

USD/JPY Remains Heavy

US TSYS

Assessing A Narrow Day

NZD

Kiwi Recoups Monday's Losses

FOREX

The Antipodeans firmed up in thin pre-LNY trade, with little of note in the way of fresh headline catalysts. AUD was aided by the improvement in NAB Business Confidence, while NZD caught a bid after the RBNZ released its inflation expectations, which recovered to levels last seen before the onset of the Covid-19 pandemic. NZD/USD rallied to its best levels in a month, looking past the reinstatement of LVR restrictions by the RBNZ & FinMin Roberson's 2021 Budget Policy Statement.

  • Commodity FX space drew further support from better crude oil prices, as Brent consolidated above the $60 level. That being said, CAD moved out of sync with its high-beta peers and landed near the bottom of the G10 scoreboard.
  • USD underperformed amid continued optimism surrounding U.S. fiscal matters. The DXY approached its 50-DMA but failed to test the level as of yet.
  • JPY traded on a slightly firmer footing, even as a contact flagged USD/JPY demand out of Tokyo ahead of the open. USD/JPY extended its recent losses and sank below the Y105.00 mark.
  • The PBOC fixed USD/CNY at 6.4533, around 10 pips above sell side estimates, PBOC injected a net CNY 30bn. Offshore yuan has continued to gain in Asia on Tuesday after the PBOC helped reassure markets saying its policies would remain stable yet flexible in its quarterly monetary policy report.
  • Focus turns to German trade balance, Italian industrial output as well as comments from ECB's Visco & Lane and Fed's Bullard.
MNI London Bureau | +44 203-865-3806 | krzysztof.kruk@marketnews.com