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AUD/USD risk reversals clock 8-week high, 2Y yield spread at lowest since 2001

  • AUD/USD risk reversals shed bearish bias.
  • Falling 2-year yield spread still favors the downside in the AUD.

Risk reverals

  • AUD/USD one-month 25 delta risk reversals witnessed an upside break of the recent trading range and clocked an 8-week high of -0.60; the highest level since Sept. 14.

2-year AU-US yield spread

  • The spread (difference) between the Australia 2-yr bond yield and the US 2-yr treasury yield continues to lose altitude.
  • Currently, the spread stands at 15.8 basis points; the lowest level since early 2001.
  • The falling yield spread validates the monetary policy divergence. The Fed is expected to raise rates in December, while the RBA is seen keeping the rates unchanged intact throughout 2018.

BoJ’s Funo: Important to continue powerful monetary easing

Reuters reporting comments from the BoJ board member Yukitoshi Funo, as he speaks at a meeting with business leaders in Miyazaki. Key Headlines: Sti
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BoJ’s Funo: Possible rise in inflation expectations to be delayed due to firms' price-setting stance

Additional headlines hitting the wires from the BoJ board member Funo (via Reuters) are found below. There is risk firms to remain cautious when sett
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