USD Trading Outlook (25-06-2014)

AUD/USD ratcheted lower throughout the NorAm session as Monday’s China PMI fades into the background and the gravitational pull from lower Aussie rates takes over. Bank Bill futures closed at contract highs as the BHP Iron Ore layoff story got traction with the London and NY crowds. The gap created on the Chinese data point on Monday at .9390ish held briefly but better than expected US data (Consumer Confidence and Home Sales) pushed the USD trade higher across the board. Heads up for a potential key reversal in the S&P that could alter the risk landscape short term, and with the All Ords looking toppy the Oz could find itself under renewed pressure if equity markets retreat. Key data point tomorrow and Thursday in the US in the form of Capex and Core PCE. The markets are dying for a trade here and are hoping a good result will break the rate market out of it’s range.