JPY

• USD upswing. Market pricing for the US Fed has shifted substantially over recent weeks. This is supporting the USD. AUD hit a 2023 low overnight.• US debt ceiling. Limited progress with the ‘x-date’ fast approaching. Ratings agencies have flagged the risk of a US sovereign rating downgrade.• AUD underperformer. The global backdrop is weighing on the AUD. Australian retail sales released today, but offshore forces are more important Mixed fortunes across asset markets, although underlying issues and risks such as the US debt ceiling negotiations, slowing growth, and still high inflation, remain firmly in place. US equities rose as...

• Negative vibes. Little progress on US debt ceiling negotiations, ongoing growth worries, & worrying UK inflation data weighed on risk sentiment.• Stronger USD. The backdrop has boosted the USD. Base metals & equities declined. AUD dipped to ~$0.6540, its lowest level since mid-November.• AUD pressure. Except for AUD/NZD, AUD also underperformed on the crosses. More pressure on the AUD expected, but stats show it is entering rarefied air. Another negative night for markets with little progress on US debt ceiling negotiations, growth worries, and some ‘sticky’ inflation data weighing on risk sentiment. Running through the list, the political impasse...

• US debt ceiling. Lack of progress has weighed on risk sentiment. US equities fell overnight and the USD added to its recent gains.• Two-speed economy. Manufacturing PMIs in ‘contractionary’ territory, while services remain robust. The former is a negative for commodity demand & the AUD.• RBNZ in focus. Another RBNZ hike expected today. The debate is around how big it could be (25bps or 50bps)? AUD/NZD is sub 1.06. US debt ceiling negotiations continue to hog the headlines and the lack of progress has weighed on risk sentiment. Equity markets lost ground with the US S&P500 falling by 1.1%....