USD Softens, But Index Still Above Wednesday Intra-Session Lows, Asia Pac Equities Higher

The USD has started Thursday trade weaker, although losses against G10 FX are capped around 0.10% at this stage. The BBDXY last near 1265.10, still up from intra-session lows on Wednesday (post the weaker US data outcomes).

• There is no cash US Tsy trading today given the July 4 holiday in the US later. US Tsy futures have had a relatively steady start, holding sub Wednesday session highs.
• US equity futures are close to flat, but the regional equity market is buoyant, with markets tracking higher (Topix hit a fresh record highs).
• This is likely weighing on the USD at the margins, although we aren't seeing high beta FX outperform the likes of JPY yet. AUD/USD was last near 0.6710, NZD/USD close to 0.6110, both up around 0.1%.
• AUD/USD got to fresh highs of 0.6734 on Wednesday will be eyed. The A$ is the best G10 performer in the past month up nearly 1%, as yield differentials have swung back in favor of the currency amid local data beats.
• USD/JPY is down a touch last near 161.50. The yen remains an underperformer, and has seen little benefit from the pull back in US yields of late.
• Elsewhere, US President appears determined to stay on and challenge Donald Trump at the Nov election. This comes despite some parts of the Democrats calling for him to step down. This morning, Aust time (late Wednesday US time), Biden met with Democratic Governors.
• Looking ahead, the data calendar is very light today, with just the Australian May trade figures on tap.