NZD: Edges Higher, But Ranges Holding, Upside Focus On 0.5760/65 (100-day EMA)
NZD/USD tracks near 0.5740 in early Friday dealings. The Kiwi was up close to 0.20% for Thursday's session, as most G10 currencies rose against the USD (except CAD and JPY). The BBDXY index only finished down modestly though, ending at 1273.3.
- Little has changed from a broader NZD technical standpoint. The currency remains wedged between key EMAs, with the 100-day, just above 0.5760, still presenting as an upside resistance point. Recent lows have been near 0.5710.
- The EU currencies, along with GBP were the best performers in the G10 space through Thursday's session. We had declines in EU and US stocks, but this didn't benefit yen. NZD/JPY is holding near 86.65/70 in early Friday dealings, back above the 50-day EMA (near 86.32).
- US yields were mixed, softer at the front end, but the 10yr edged up to 4.36%. NZ-US 2yr swap spreads are up modestly to -48bps. supporting a slightly firmer NZD backdrop. US data on Thursday was fairly close to market forecasts, with initial jobless claims steady.
- NZ data has seen the ANZ consumer confidence print for March dip a further 3.5%, bringing the index back to 93.2 and continuing the generally softer trend for sentiment since end 2024. Feb jobs filled edged up 0.1%m/m, after a 0.3% gain in Jan.
- Next Monday we have the March ANZ activity outlook and business confidence prints due.
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OIL: Crude Inventories Lower After Large Stockbuilds
Bloomberg reported that US crude inventories fell 600k barrels last week after rising 3.3mn the week before, according to people familiar with the API data. Stocks at Cushing rose 1.2mn. Gasoline increased 500k, while distillate fell 1.1mn. The official EIA data is out later today.
JPY: USD/JPY To Fresh Multi Month Lows Amid Further US Yield Drop
Yen tracks near 149.00 in early Wednesday dealings. USD/JPY touched fresh lows of 148.57 in US trade on Tuesday, post softer US consumer sentiment. This is levels in the pair last seen in Oct last year. Yen gained around 0.50% for Tuesday's session, just short of the top G10 performers. Broader USD sentiment was softer, although some higher beta plays like AUD and NZD lagged.
- For USD/JPY technicals, the bears remain in the driver's seat. Tuesday weakness in the pair pushed prices through key support at 148.65, the Dec 3 ‘24 low, to strengthen the bearish condition and pave the way for an extension towards 146.95, a Fibonacci retracement. On the upside, initial firm resistance to watch is 152.34, the 20-day EMA.
- US Tsy yields are down sharply, the 10yr yield sub 4.30%, lows seen in the first half of Dec. The Citi US economic activity surprise index is in negative territory and also at multi month lows amid softer data outcomes.
- US-JP yield differentials continue to point to lower USD/JPY levels. US equities finished weaker, with the Nasdaq continuing to underperform. EU equities were more mixed. AUD/JPY got to fresh lows near 94.00, but sits slightly higher now at 94.55/60.
- On the data front today, we have the final Dec reads for the leading and coincident indices.
- In the option expiry space, note the following for NY cut later today: Y149.00($956mln), Y150.00($833mln), Y150.20-25($780mln), Y151.00($1.4bln), Y151.95($1.0bln).
AUD: Risk-Sensitive Currencies Underperform, Aussie CPI Coming Up
Risk-sensitive currencies underperformed on Tuesday with equities weaker and US consumer confidence for February disappointing and Dallas Fed services lower. AUDUSD is down 0.1% to 0.6346 after a low of 0.6322. The USD index is off its intraday low but still down 0.2%.
- Despite yesterday’s underperformance, AUDUSD’s trend condition remains bullish. Initial support is at 0.6315, 50-day EMA, and resistance at 0.6409, February 21 high.
- The yen outperformed in the weaker risk environment leaving AUDJPY down 0.5% to 94.55 but off the intraday low at 94.02.
- Kiwi underperformed Aussie and so AUDNZD is up 0.1% to 1.1084. The pair rose to 1.1092 during European trading but then fell to a low of 1.1066.
- AUDEUR trended lower throughout Tuesday reaching a trough of 0.6017. It is currently down 0.5% to 0.6035. AUDGBP fell to 0.4993 but is now around 0.5008 to be 0.4% lower.
- Equities sold off with the S&P down 0.5% and Euro stoxx -0.1% but the FTSE rose 0.1%. Oil prices fell sharply with Brent -2.2% to $73.17/bbl. Copper is up 1.3% following news of US investigations into copper imports. Iron ore is around $106/t.
- Today January CPI data print with headline forecast to rise 0.1pp to 2.6%. Q4 construction work is also released.
