The 10-year yield spread touched -8.8 bps yesterday, lowest since 2000

It's not one something that has impacted the AUD/USD in January, but we're starting to see some return to form in the good ol' correlation.

The yield differential continues to slide, and this shows how much the divergence is in the market's view between the RBA and the Fed.

And the aussie is beginning to show some signs of weakness over the past few weeks, as it is even now weaker than the dollar in terms of year-to-date performance.

AUD/USD is holding steady so far today though, with ranges still tight. Currently at 0.7813, at the top end of the range. Also, do look out for option expiries nearby, as we have a large one sitting at 0.7780 - currently valued at AUD 770m.