Snapshot: AUD/USD trades at 0.7132, down 0.11% on the session, weighed down by building expectations that the RBA is nearing the end of its tightening cycle. Recent weak household spending data reinforces this view. Focus now shifts to the 08:30 ET US data dump.
- Breach of 0.7100 support would open the door to further downside.
- Watch for any surprises from RBA speakers, particularly Assistant Governor Hunter, given her recent speech on inflation.
Bias into NY: We favour selling rallies in AUD/USD towards 0.7150, targeting a move down to 0.7080. Weakness in Australian yields and the 39bp negative US-AU 10Y spread support this view, and DXY around 99.13 could see further gains should the US data surprise to the upside.