The AUDUSD jumped yesterday after the June Employment data added to the expectations of further hikes in interest rates by the RBA, forcing bond yields higher. The AUDUSD traded to near 0.6850 resistance only to be returned back under 0.68-cents following US-dollar strength, on the tail of a better US Jobless Claims report overnight, that suggests inflationary pressures remain elevated. Yesterday, the PBoC set the Renminbi reference rate higher than expected and raised the threshold for offshore borrowings, though it did choose to keep its commercial bank loan prime rates steady. On the markets today, while the AUDUSD holds above short term support, further challenges to the 0.6840/50 zone will be eyed by day traders.
Wall Street indices were mixed overnight, with the Dow recording a gain on the tail of Johnson and Johnson forward guidance on earnings being above expectations, while the Nasdaq was weighed down by the quarterly results from Tesla and Netflix. The DJI was up 0.5%, the S&P500 closed lower, -0.7% and the Nasdaq also closed down -2.1% for the session. Australian shares look to open softer today, after the June Labour reports keep the rate hike expectations firmly on track for the next meeting of the RBA.
Gold prices eased off their recent highs, as investors returned to expectations of the Fed to keep rates higher for longer, though analysts still foresee one more hike only from the Central Bank before they pause, which are helping to underpin lustre metal prices.
Copper prices steadied with the US-dollar strength, as hopes circulate that China will announce additional stimulus to their economy. Iron Ore prices recovered as traders contemplate the introduction of further stimulus from Beijing, particularly to their ailing property sector.
Brent Crude Oil prices ground their way higher for the session, prompted by tighter US crude supply with lower reports of crude inventories and suggestions that China will stimulate its flagging economic growth, but investors remain cautious.
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