Good Morning,
Market Headlines
US equities rose moderately overnight with the S&P 500 gaining 0.6%, while the NASDAQ rose by 1.1% to start the week. On the commodities front, Brent rose 2.1% to $43.10, copper up 1.7%, iron ore dropped 1.3% to $101.30, and gold finished up 0.7%. US 2yr treasury yields ranged between 0.18% and 0.19%, while the 10yr yield rose to 0.71%.
Currencies
The US Dollar Index closed 0.6% lower on the day
EUR traded between 1.1190 to 1.1270
USD/JPY ranging between 106.80 and 107.00
AUD rose from 0.6860 to 0.6923
NZD rose from 0.6420 to 0.6494
AUD/NZD ranged between 1.0630 and 1.0665
AUD Thoughts
AUD/USD regains lost ground and rallies 1.5% to 0.6920 area.
The AUD appreciates on the back of RBA’s comments and US dollar weakness.
The Australian dollar is being one of the best performers of the G-10 currencies today, staging a 1.5% rally against a somewhat weaker US dollar. The Aussie has bounced from 0.6805 lows to pare losses from four consecutive negative days and return to levels above 0.6900.
The RBA and a softer dollar lift the Aussie
RBA Governor Lowe has buoyed the AUD on Monday, discarding that the recent strength of the currency might pose a problem to the economy. Lowe has also assured that Australia has "a fantastic set of underlying fundamentals" and that therefore, the economic impact of the COVID-19 pandemic will not be as bad as expected.
This has fuelled AUD demand further which has also been favoured by US dollar weakness. The decline of US treasury yields, with the 10-year bonds down nearly 3% on the day has weighed on the dollar, which went south against its main peers.
Event Risk Data Today
Japan: The Jibun Bank manufacturing and services PMIs.
Taiwan: May Industrial Production
Germany: PMI Data, expected to show signs of improvement across manufacturing and services.
Eurozone: Markit PMI data continues in the Eurozone overnight
US: New Home Sales June Markit PMI, May new home sales, June Richmond Fed manufacturing