The aussie has started a week packed with market-moving events in Australia on the backfoot. Still, economists at ING remain tied to global risk sentiment. Therefore, AUD/USD needs a recovery in global equities to climb back above 0.70.

Some key data to watch before the elections

“Tomorrow, the minutes from the Reserve Bank of Australia's May meeting will be scanned closely for hints about the timing and size of additional monetary tightening. On Wednesday, the long-awaited wage data for 1Q will be released. On Thursday, the employment figures for April will be published, with a chance the jobless rate will fall below 4.0%.”

“Australia’s Federal elections will be held on 21 May. The latest opinion polls see the incumbent prime minister Scott Morrison’s Liberal-National coalition trailing about 3% behind the centre-left Labour party.”

“We think AUD will remain tied to global risk sentiment and China-related developments, and the impact of domestic factors may be rapidly offset by external factors.”

“Some recovery in global equities is surely needed at this point for AUD/USD to climb back above 0.7000, while another risk-off wave could send the pair to the 0.6600-0.6700 area in the near-term.”