8th June 2021 - AUD/USD: Bulls ease control but stay in power around 0.7750 amid mixed sentiment

Good Morning,

Market Headlines

Markets were mostly in consolidation mode in the wake of Friday’s US jobs data surprise. The S&P500 is down 0.2% and bond yields are slightly higher, although the USD did slightly extend the recent decline. US 2yr treasury yields rose from 0.15% to 0.16%, while the 10yr yield rose from Friday’s close of 1.55% to 1.58%. Australian 3yr government bond yields (futures) traded around 0.21%, while the 10yr yield rose from 1.56% to 1.59%.

Commodities, Brent crude oil futures fell 0.5% to $71.55, copper fell 0.2%, and gold rose 0.4%, while iron ore fell 3.2% to $201.90.

Overnight Currency Ranges

AUD/USD 0.7727 0.7765

EUR/USD 1.2145 1.2202

GBP/USD 1.4112 1.4191

USD/JPY 109.19 109.63

NZD/USD 0.7194 0.7242

USD/CAD 1.2058 1.2106

USD/CNH 6.3849 6.3994

AUD/JPY 84.66 84.87

AUD/NZD 1.0719 1.0746

AUD Thoughts

A quiet day on the data calendar with local business conditions and confidence the highlight. Markets are seemingly in a holding pattern as they await the key events of the week in the BOC and ECB meetings and the US inflation reading.

AUD/USD traded to a high of 0.7765 overnight with offering interest still expected ahead of the recent highs of 0.7815/20 while demand has grown and likely rests ahead of 0.7680.

Event Risk Data Today

Australia: The NAB business survey has jumped 14pts to 32 over the past 2 months, raising the possibility of a pullback in the upcoming May update.

Euro Area: The market is looking for no revisions in the final print of Q1 GDP, -0.6%qtr. The June ZEW survey of expectations should continue to look through to the economic rebound in H2.

US: Confidence will be running high in the May NFIB small business optimism index (market f/c: 100.9). Strong consumer demand, and resultant strength in imports, is likely to be at play in the April trade balance (market f/c: -68.5bn). April JOLTS job openings will be in focus, given the attention on hiring rates and vacancies.