AUD: Asia Wrap - AUD/USD Edges Lower
The AUD/USD has had a range of 0.6476 - 0.6511 in the Asia- Pac session, it is currently trading around 0.6490. The AUD has edged lower in our session -0.28%. All eyes are focused on the potential entry of the US into the Israel-Iran Conflict.
- AU DATA: Q2 Labour Market Conditions Little Changed. While headline new jobs were softer than expected, the details remained quite strong and signalled no easing in labour market conditions. Employment fell 2.5k but full-time jobs increased 38.7%, hours worked rose sharply and underemployment fell. The unemployment rate was stable at 4.1%, the fifth straight month. The data is consistent with the RBA remaining cautious.
- (Bloomberg) -- “US Preparing Strike On Iran In Coming Days. Headlines have crossed this morning that the US is preparing for possible strikes on Iran in coming days, with the weekend being eyed. The article stressed that the situation is evolving and plans could change.”
- The AUD/USD looks short-term to be comfortable in a 0.6450-0.6550 range as the market waits for more clarity on the Middle East and any confirmation of the US joining the fray.
- Price remains in the wider 0.6350 - 0.6550 range for now, a sustained break above 0.6550/0.6600 is needed for the move higher to accelerate.
- Technically buyers should continue to be around on dips while the support in the AUD/USD holds, a close back below 0.6350/00.6400 would start to see bulls be challenged.
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6600(AUD1.15b), 0.6460(AUD708m). Upcoming Close Strikes : 0.6650(AUD 708m June 20), 0.6372(AUD 555m June 20)
- AUD/JPY - Today's range 93.81 - 94.51, it is trading currently around 94.15.Choppy price action as the pair establishes a range between 92.00 - 96.00. A break back below 91.50/92.00 is needed to see the move lower regain momentum and the focus turn back to the year's lows again.
Fig 1: AUD/USD spot Hourly Chart
Source: MNI - Market News/Bloomberg Finance L.P
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
JPY: Asia Wrap - Kato Remarks Test Overnight Lows
The Asia-Pac range has been 144.73 - 145.51, Asia is currently trading around 144.80. Early demand for USD’s going into the Japanese Fix was met by fresh selling reacting to comments from the Japanese Finance minister Kato, this saw a quick move to revisit the overnight lows where some demand again returned.
- "*KATO: ARRANGING BESSENT MEETING TO DISCUSS TOPICS INCLUDING FX, TALKS W BESSENT ON FX WILL SEEK TO FOLLOW EXISTING STANCE" - BBG
- Akazawa made comments this morning reiterating his commitment to seek a removal of “All US Tariffs”.
- Very poor demand seen in the 20-year JGB auction today, tail the longest since 1987.
- Nippon Steel pledged to invest more in US Steel — including building a new mill and preserving jobs — if the US approves their merger, people familiar said.(BBG)
- USD/JPY continues to test its support and the price action is interesting considering the bounce in stocks.
- The support around 144/145 looks important now and a break would once again bring the focus back to the pivotal 140.00 area. The price action though does not look great and the market is still more comfortable selling rallies.
Options : Closest significant option expiries for NY cut, based on DTCC data: 145.50($1.03b May 20), 145.00($789.7m May 20) , Upcoming Strikes : 145.00($2b May 23),144.00($1.37b May 23), 140.00(1.67b May 23)
Fig 1 : USD/JPY Spot Daily Chart
Source: MNI - Market News/Bloomberg
CHINA: Bond Futures Down Modestly
- China's bond futures are down modestly today across all maturities.
- The 10YR is down -0.02 at 108.78 and maintains its position at the mid-point between the 20-day EMA of 108.85 and the 50-day EMA of 108.71
- The 2YR is down -0.03 at 102.35 and remains well below all major moving averages. The nearest being the 20-day EMA of 102.50.
- China's 10YR government bond is higher in yield by +1bp at 1.66%
- China announced a cut in their loan prime rates today by -10bps as expected by the market.
STIR: RBA Dated OIS Pricing Softer Ahead Of Today’s RBA Policy Decision
Figure 1: RBA-Dated OIS - Today Vs. Prior
Source: MNI - Market News / Bloomberg
