USD Supported By Firmer Yield Backdrop

The USD has mostly been supported today, albeit within recent ranges. US yields have tracked higher, with higher oil and debt issuance fears (post the debt ceiling agreement) appearing as supports. However, we are off session highs at this stage, with the 2yr back at 4.53%, after getting close to 4.55% in early trade.

• This has likely helped curb USD gains to a degree, with the BBDXY last around 1242.70/75, versus 1243.30 highs for the session. USD/JPY got to fresh highs of 140.25/30 but we now sit back at 140.05/10. Positive PMI revisions for May did little to boost yen sentiment.
• AUD/USD dips sub 0.6600 have been supported but we still sit lower versus NY closing levels from the end of last week. AU data has been mixed today, but not shifting the RBA expectations needle much ahead of tomorrow's outcome, with market pricing close to 50% priced for a 25bps move at this stage.
• The China Caixin services PMI printed better than expected, dragging the A$ from its lows, but follow through has been limited.
• NZD/USD is softer but within recent ranges, last 0.6060. NZ onshore markets have been closed today.
• EUR/USD was last just under 1.0700, GBP/USD is -0.20% weaker, sitting at 1.2425/30 currently.
• Looking ahead, we have Swiss CPI, EU and UK PMIs for the services sector. ECB's Lagarde also speaks. In The US, the ISM services PMI and factory orders are on tap.