USD/JPY Pierces Y115.00 Amid Holiday-Thinned Liquidity, Iron Ore Rally Aids AUD

The break lower in U.S. Tsy futures lent some further support to the USD, which coincided with a leg higher in USD/JPY. The pair pierced the Y115.00 figure for the first time since '17 as a result. Many have been linking these moves to the comments from Atlanta Fed Pres Bostic, who became the latest Fed member to flag the potential for a quicker pace of tapering. Worth mentioning that Japanese markets were closed in observance of a public holiday, which means that JPY crosses were subject to thinner liquidity.

• NZD/USD retreated to a fresh multi-week low, as the kiwi dollar showed some broad-based weakness, even as the contraction in New Zealand's retail sales was shallower than expected. The proximity of the RBNZ's monetary policy decision likely played a role here, as participants prepared for tomorrow's announcement. NZD/USD overnight implied volatility leapt to its highest point since Oct 5.
• AUD/USD recouped a dip driven by aforementioned greenback strength, as a surge in iron ore futures, which were aided by optimism surrounding Chinese demand. Antipodean divergence continued to unfold and AUD/NZD advanced towards its 50-DMA.
• Today's yuan fixing was softer than expected, with the central USD/CNY mid-point set 25 pips above sell-side estimate. Offshore yuan was unfazed and traded on a slightly firmer footing.
• A flurry of PMI readings from across the globe headline today's data docket. Speeches are due from BoE's Bailey, Cunliffe & Haskel, ECB's Makhlouf & de Guindos as well as BoC's Beaudry.