Good Morning,
Market Headlines
US tech stock remained under pressure, the NASDAQ down 0.6% to a one-month low, and the broader S&P500 unchanged. Some of that sentiment rippled to bond yields, while US 2yr treasury yields fell from 0.14% to 0.13% & 10yr yield fell from 0.69% to 0.66%. Commodities, Brent crude oil futures fell 0.6% to $39.85, copper rose 1.6%, iron ore rose 2.5% to $129.00, and gold fell 0.3%.
Currencies
AUD/USD: 0.7259 – 0.7306
EUR/USD: 1.1827 – 1.1874
GBP/USD: 1.2763 – 1.2866
USD/JPY: 106.06 – 106.26
USD/CAD: 1.3151 – 1.3208
NZD/USD: 0.6643 – 0.6694
AUD/JPY: 77.03 – 77.57
AUD/NZD: 1.0907 – 1.0930
AUD Thoughts
- AUD/USD keeps late-Friday recovery from 0.7258 but stays capped below 0.7285.
- US inflation data came in positive, Brexit, US-China tussle also challenged the bulls.
- Oxford vaccine, AstraZeneca, to restart trials halted last week, China retaliated US sanctions.
- A light calendar at the week’s start will keep risk catalysts on the driver’s seat.
A light calendar in Asia and during the US session will keep markets watchful of the risk catalysts for fresh moves. Herein, market fears are likely to remain dominant unless equities manage to escape another tech rout. As a result, AUD/USD bulls should be careful.
The pair’s choppy trading between 10-day and 21-day SMA, respectively around 0.7280 and 0.7260, since last Thursday. As a result, any decisive move, mostly up, beyond the stated range becomes necessary for the pair to register increased trading momentum. It should, however, be noted that the pair formed Doji candlestick on the weekly chart, which in turn suggests a reversal of the previous week’s bearish move from the multi-month high of 0.7416.
Event Risk Data Today
NZ: The July improvement in Business NZ services PSI to 54.3 looks likely to be reversed in August due to renewed Covid-19 restrictions. July net migration will be constrained by border restrictions (prior: 760). The Prime Minister will announce an update to Covid activity restrictions (currently level 2).
JP: Industrial production jumped 8.0% in July but is still below pre-pandemic levels.
Eurozone: The market expects industrial production growth to decelerate in July (prior: 9.1%, market f/c: 2.7%).