Risk Currencies Buoyed By Potentially More China Property Support

Risk currencies have continued to outperform, with the latest leg higher driven by headlines that China is mulling further support for the troubled onshore property sector.

• China is contemplating a significant proposal to address its struggling property market by having local governments purchase millions of unsold homes, with the aim of converting them into affordable housing (per Bloomberg).
• Both AUD and NZD are +0.30% firmer against the USD. AUD/USD was last around 0.6645/50, just off session highs (0.6651). This right around the May 3 high, while 0.6668 represents the Mar 8 high and is also viewed as key short term resistance.
• The currency largely shrugged off a slightly weaker than expected Q1 wages print. Commodities are higher, led by copper, although iron ore is showing less enthusiasm to the China news, the active contract last near $114/ton.
• NZD/USD was last near 0.6060, not too far from the 200-day EMA (0.6068).
• USD/JPY is close to unchanged, last around 156.40/45. This leaves the yen weaker on crosses, particularly AUD and NZD.
• In the cross asset space, US equity futures sit a touch higher, while regional equities are mostly higher. China mainland markets are lower, but property sub-indices are higher.
• US yields are relatively steady. The BDXY sits down a touch, last at 1251.2 (off just under 0.10%).
• Looking ahead we have the US CPI as the main focus point coming up. Outside of the US inflation print, appearances from ECB's Rehn, Muller, Villeroy & Makhlouf and Fed's Kashkari & Bowman are due.