Risk Sentiment Stays Positive, RBA Speak Moderates AUD Gains

Comments from RBA Gov Lowe tempered AUD gains driven by better risk appetite, as the official said that the Board didn't contemplate a 75bp hike to the cash rate target at its recent meeting, adding that a 25-50bp move seems to be the most likely outcome at the July meeting. Market participants responded by withdrawing hawkish RBA bets, with a 50bp hike in July no longer priced in (down to ~80% implied chance of such a move at typing).

• AUD/USD refreshed session highs later on, as broader risk sentiment remained positive, but the pair struggled to attack its best levels from yesterday. The NOK took over as best performer in G10 FX space.
• AUD/NZD crept higher as a quarterly Westpac Survey showed that consumer confidence in New Zealand tumbled to a record low. The rate tested yesterday's high, even as AU/NZ 2-Year swap spread slipped.
• Safe haven currencies underperformed, with the U.S. dollar leading declines for the second consecutive day. U.S. financial markets are set to re-open after a long weekend.
• Focus turns to U.S. existing home sales, Canadian retail sales and comments from Fed's Mester & Barkin, ECB's Rehn & Kazimir, BoE's Pill & Riksbank's Skingsley.