Investment-grade corporate credit risk cooled Friday, back near October lows amid a cautious bounce in stocks as more hawkish (read: 75bp) year end rate hikes debated.
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Late session volatility - stock indexes were firmer after experiencing some post-FOMC swings: Hawkish forward guidance weighed on equities (initial selling sent SPX to 3836.75 low) and helped push 2YY to new 15 year highs of 4.1168%, yield curves extending inversion (2s10s -52.492 low).
AUDUSD is trading lower and is once again below key support at 0.6682, Jul 14 low. A clear break of this level strengthens bearish conditions and confirms a resumption of the broader downtrend. Sights are on 0.6647 next, a Fibonacci projection ahead of 0.6612, the May 29 low. The Sep 13 high of 0.6916 marks a key short-term resistance. A break of this level is required to alter the picture.