USD Supported On Dips, But Tight Ranges Overall

The USD BBDXY index sits up from session lows sub 1250, last near 1250.50 (still down modestly for the session) but has traded tight ranges overall.

• In the G10 space, the A$ and JPY are the underperformers, although all majors are away from best levels against the USD.
• USD/JPY has nudged up to 157.40/45, currently around session highs. Earlier lows were at 157.00. We had weaker than expected Q1 capex figures earlier, but the yen didn't react to the print. Equity sentiment is mostly positive through the region, while US equity futures are also higher. US yields are slightly lower at the back end of the curve.
• AUD/USD probed above 0.6660, but sits back under 0.6650 in recent dealings. Some offset to the positive equity tone has come from further weakness in iron ore prices, down nearly 4% to the low $111/ton region. Higher iron ore inventories weighing on sentiment.
• May inflation expectations eased back to 3.1% y/y for Australia from 3.7%, although the m/m outcome was still higher than April's read. The better Caixin China manufacturing PMI hasn't shifted sentiment.
• NZD/USD is a touch higher, last near 0.6150 but away from session best levels.
• Looking ahead, US May manufacturing ISM/PMIs and European manufacturing PMIs print.