- The US 10-year Treasury yields dropped from 2.11% to 2.08%.
- AUD/USD continued in its southerly trajectory, from 0.6875 to 0.6849 ahead of today's RBA Minutes.
Forex today was driven in the main by a fall in US yields ahead of the FOMC meeting this week while US data gave the dollar a sucker-punch which it took on the chin, holding steady amidst heightened Brexit and various other geopolitical uncertainties elsewhere.
The US 10-year Treasury yields dropped from 2.11% to 2.08% following dismal U.S. data whereby the New York Fed's Empire State index of manufacturing sentiment dropped to a record 26.4pts in the month to -8.6, a 2 ½ year low.
"The abrupt fall was led by new orders which fell -21.7pts to -12, though shipments, employment and CAPEX plans all notably eased too. The survey was conducted in early June when concerns about tariffs on imports from Mexico were at their height. Sentiment among US homebuilders slipped in June too, the NAHB index falling unexpectedly to 64 from 66 despite a big decline in mortgage rates this year," analysts at Westpac explained.
Currency action
EUR/USD traded between 1.1210 to 1.1247 and back while GBP/USD dropped from 1.2600 to 1.2535 on hard Brexit presumptions should Boris take over Number 10 Downing Street.
USD/JPY stuck to a tight range between 108.50 and 108.70 and AUD/USD continued in its southerly trajectory, from 0.6875 to 0.6849. The bird was perched for the best part of the day around 0.6500. AUD/NZD dropped from 1.0580 to 1.0540/50.
Key-notes from Wall Street:
Key events ahead:
The minutes from the June RBA Board meeting are due at 11:30am Syd/9:30am Sing/HK - The minutes of the Reserve Bank of Australia meetings are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. Generally speaking, if the RBA is hawkish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate increase, and that is positive for the AUD.
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