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Australian dollar hits a session high as the New York week gets underway. RBA later

How does that coal look now?

China’s decision to boycott Australian coal isn’t looking too wise at the moment as prices jump to skyhigh levels and China is threatened with power outages.

The RBA meeting is at 2330 GMT today and it will be a tricky on as the pandemic begins to clear out the Australian political scene. Thankfully vaccination progress is continuing but there’s a huge reserve of people in the country who haven’t been infected, meaning the early success there could mean a long-term drag.

The mood in equity markets is stable markets with S&P 500 futures down 18 points. But FX is often a leading indicator and the dollar is under some pressure, despite 10-year yields rising 2 bps.

On equities, I would note that 62% of stocks in the S&P 500 are down 10% from their 52-week highs and 16% are down 20%. The internals aren’t quite as solid as the index.

AUD/USD is up 32 pips and is having a look above Friday’s highs. That’s the best level since Sept 27.

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