FED: Assets Fall Slightly In Latest Week On MBS Runoff (1/2)

Aussie outperformed on Tuesday along with other risk-sensitive currencies given better equity sentiment and also the fall in the US dollar following softer-than-expected US manufacturing ISM and job vacancy data. AUDUSD had been tracking around 0.6250 before the data and then jumped to 0.6283 afterwards. It is now up 0.5% to 0.6278. The USD index fell 0.1%.

• Tuesday’s appreciation of the AUD against the US dollar was consistent with intraday weakness being corrective. A clear break of 0.6187, 4 February low, is needed to reinstate the bear threat, whereas clearance of 0.6409, 21 February high, is needed to strengthen the bull cycle. Initial support is at 0.6219 and resistance at 0.6331.
• The euro underperformed leaving AUDEUR up 0.7% to 0.5817, close to the intraday high. AUDGBP is 0.5% higher at 0.4858.
• While the yen and kiwi were both stronger against the greenback, they fell versus the Aussie. AUDNZD is up 0.1% to 1.1014. The pair trended higher following the RBA decision to a peak of 1.1032 but then moderated to around 1.1010. AUDJPY is 0.2% higher at 93.89 after a low of 93.15 during European trading.
• Equities were stronger with the S&P up 0.4% and Euro stoxx +1.4%. Oil prices fell with Brent down 0.5% to $74.41/bbl. Copper was little changed and iron ore is higher at around $104/t.
• Building approvals for February are released today and forecast to fall 1.3% m/m after rising 6.3%.