Forex Flash: AUD/USD buoyed by 1.0150 level, eyes Chinese data – NAB

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FXstreet.com (Barcelona) - The AUD/USD has drawn support in recent days from a squeeze on some short positions after the 1.0150 level proved to offer very strong support. According to the NAB Analyst Team, "Near-term fortunes for the AUD are likely to turn on the next set of China data.

Should these collectively fail to offer any evidence that a bottom for China growth is now in place, the AUD/USD is likely to trade back to - and through - the recent 1.0150 low."
In addition, the RBA now expected to cut 25bps in November via a soft employment report and weak NAB survey supporting this view. "The market largely priced for a cut so little value in receiving Nov OIS - the direction for yields remains driven by offshore market as bonds seen to be in mid point of range with swaps at the lower end." they add.

Finally, "Semi-government spreads have scope to tighten a little more as swap-bond spreads tighten. Our target for AAA rated 10y semi-government to benchmark spread remains at 60bps (currently around 68bps). Against swap, spreads are likely to remain near recent wides, at least for now." the Team predicts.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Forex and Currencies

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