AUD/USD is subdued at around 0.6648 as market awaits fresh catalysts

On Wednesday, US economic data provided mixed signals, though market players continued to price in 40 basis points of easing throughout the year. This weighed on US Treasury yields, which plunged around 5 basis points (bps), with the 10-year Treasury note rate down to 4.277%.

Data-wise, the Institute for Supply Management (ISM) revealed that business activity in the services sector jumped to its highest reading since August 2023. The ISM Services PMI rose by 53.8, exceeding estimates of 50.8 and April’s 49.4.

“Survey respondents indicated that overall business is increasing, with growth rates continuing to vary by company and industry,” wrote Anthony Nieves, ISM Services Business Survey Committee Chair.

Earlier, data from Automatic Data Processing (ADP) revealed that private hiring increased by 155K, lower than estimates of 175K, and missed April’s 188K, according to the National Employment Change report.

On the Aussie’s front, Wednesday's Gross Domestic Product (GDP) data for the first quarter of 2024 came at 0.1% QoQ, while yearly figures rose by 1.1%.

ANZ analysts wrote, “We see little in this release that would change our view on the RBA or the general outlook for the economy. The pace of GDP growth over the past six months is a little weaker than we anticipated, but labour market conditions have only eased slowly over the same period while recent inflation data have shown some stickiness.”

Ahead of the week, Australia’s economic docket will feature the Balance of Trade, which is expected to print a surplus of A%5.40 billion in April. Other data, like Home Loans and Private housing approvals, are also expected.

On the US front, the schedule will feature last week's initial jobless claims and the Balance of Trade on Thursday