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
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.