Weaker Metals/Equity Slump Drives Near 2.5% Correction

The AUD was the worst performer within the G10 basket through Thursday's session. AUD/USD lost around 2.4%, currently sitting at 0.6700, slightly up from NY session lows of 0.6677. From a technical standpoint, we have breached the 20-day EMA at 0.6728, while the 100-day comes in at 0.6696, very close to current spot levels. A break below the 50-day, which is at 0.6658, may signify a deeper correction for the AUD.

• A$ sentiment was hit by broad USD gains, the BBDXY up nearly 1%, while commodity prices faltered, particularly in the base metal space. The aggregate Bloomberg commodity index fell by 0.66%, but the base metals sub-index lost just over 2%.
• ECB rhetoric was hawkish as they hiked by 50bps. EU related yields surged, but EUR/USD still finished weaker, albeit outperforming the G10. A number of other central banks also delivered hikes.
• US data was also on the softer side, but this appeared to add to the risk off mood in equities rather than denting USD sentiment. Major equity indices were weaker across the board. The VIX is back closer to 23%.
• On the data front today we have the preliminary PMI readings for December.