INSIDE AUSTRALIA: Aussie Rises; May Test 0.7533 on RBA: Barclays

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AUD/USD advances 0.1% to 0.7653 after losing 3.3% in May; pivot point at 0.7650; support at 0.7626, 0.7606, 0.7562; resistance at 0.7670, 0.7694, 0.7738.

  • Williams %R at -93, in oversold territory
  • 1-mo. implied volatility rises 34 bps to 12.9775%; past yr’s avg is 9.7489%; 1-mo. risk reversals lose 2 bps at -119 bps
  • Shorting spot AUD/USD at current levels and targeting 0.7533 near-term is Barclays’s trade of the week as an RBA easing bias and robust U.S. economic data should push currency lower, according to note dated May 31; expects RBA to again make the case for further weakness in the A$ given commodity prices
  • April building approvals fell 4.4% m/m vs est 1.8% fall
  • China PMI shows signs of stabilization after monetary easing
  • RBA’s Edey tells parliamentary committee housing market is overheated, risky; says few months before impact of APRA housing steps seen
  • Net non-commercial AUD longs trimmed to 6,422 contracts in week ended May. 26, from 7,323 a week earlier, according to CFTC data; net NZD shorts increased to 5,087 from 2,231
  • 3-year govt bond yield drops 2 bps to 1.866%; 10-year yield falls 2 bps to 2.712%
  • 1-year IRS steady at 2.0425%, while 5-year IRS little changed at 2.5250%
  • NZD/USD up 0.1% at 0.7115 after recovering from stop-loss selling at the open during N.Z. holiday closure

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