Good Morning,
Market Headlines
Upbeat market sentiment remained upbeat as the S&P500 is up 0.2% to a fresh five-month high coupled with major commodities prices overall being higher, whilst bond yields remained unchanged. Yesterday saw a historic agreement on fiscal burden sharing in Europe, the US indicating further stimulus measures and promising vaccine news.
Currencies
AUD/USD: 0.7041 – 0.7147
EUR/USD: 1.1425 – 1.1540
GBP/USD: 1.2672 – 1.2768
USD/JPY: 106.68 – 107.36
USD/CAD: 1.3425 – 1.3514
NZD/USD: 0.6575 – 0.6650
AUD/JPY: 75.51 – 76.30
AUD/NZD: 1.0709 – 1.0754
AUD Thoughts
- AUD/USD bounces off 0.7118 after stepping back from multi-day high of 0.7148.
- Market optimism, broad US dollar weakness underpinned the pair’s heaviest rise since early June.
- RBA minutes cited policymakers’ refrain to use easy money tools, for now, Governor Lowe showed readiness for a rate cut.
- Australia’s Westpac Leading Index, Preliminary readings of Retail Sales will offer immediate direction, coupled with risk catalysts.
Looking forward, markets will wait for the June month’s preliminary readings of Australia’s Retail Sales, expected 7.1% versus 16.9% prior. Ahead of that, Westpac Leading Index for the Pacific major, prior 0.19%, as well as risk catalysts can offer intermediate moves. Considering the likely softness in the Aussie data, coupled with risk reset, the AUD/USD prices may retrace from the monthly high in adverse conditions. However, odds are currently favouring further upside to 0.7200 threshold.
Sustained clearance of 0.7100 enables the AUD/USD bulls to challenge highs marked in April 2019 and late-February 2019, around 0.7200. However, overbought Relative Strength Index (RSI) suggests a mild pullback that can become worries if it drags the quote below July 2019 peak surrounding 0.7085-80.
Event Risk Data Today
AU – June retail sales
AU – Westpac Leading Index
CA – June CPI
JP - July Jibun Bank manufacturing and services PMI
US – June existing home sales