US TSYS: Futures Extend Post-FOMC Rally, Policy Patience From Fed

In local morning trade, NZGBs are unchanged. 

• US markets were closed on Monday in observance of the Presidents' Day holiday. TYH5 is at 109-06+, -0-03+ compared to closing levels.
• NZ’s estimated population rose to 5,356,700 at the end of 2024, 48,500 more people than on December 31, 2023. This increase comprised a natural growth of 21,400 and a net immigration gain of 27,100.
• Swap rates are flat to 1bp higher.
• Today, the local calendar is empty, ahead of the RBNZ Policy Decision tomorrow. RBA Policy Decision is today.
• The RBNZ decision is widely expected to cut rates 50bp again to 3.75%. Revised staff forecasts will also be published.
• All 22 analysts surveyed by Bloomberg are forecasting a 50bp rate cut and the RBNZ shadow board is recommending 50bp of easing.
• RBNZ dated OIS pricing is little changed across meetings today. Notably, OIS pricing is 2–19bps firmer than pre-Q4 Labour Market data levels from February 4.
• Nevertheless, 49bps of easing is priced for Wednesday, with a cumulative 111bps by November 2025.
• On Thursday, the NZ Treasury plans to sell NZ$250mn of the 4.50% Apr-27 bond, NZ$200mn of the 4.25% May-34 bond and NZ$50mn of the 1.75% May-41 bond.

• NZD/USD closed +0.21% at 0.5737 in what was a very quiet session with the US out for Presidents day overnight. Ranges were incredibly tight after the Asian trading session had ended. Focus this week with be on the RBA rate decision later today, followed by the RBNZ tomorrow, both CBs are expected to cut rates.
• Leveraged funds short positioning decreases a second week, while asset managers short positioning hits a fresh record (2006) high, according to CFTC snapshot on Feb. 11
• The close back above key resistance of 50-day EMA and 0.5700, on Friday was the first time trading above the 50 day EMA since early October, signaling a change in momentum, the RSI is at its highest levels for the year, while the MACD indictor is printing green bars. Key levels to watch include, resistance is 0.5763 (Dec 18 highs), while 0.5790 (100-Day EMA) become a target. To the downside, a hold above the 50-Day EMA at 0.5700 is important, a break here would open a move to 0.5668 (20-day EMA)
• The NZ-USD 2yr swap has moved from -83bps to -69bps the highest since late Jan.
• RBNZ dated OIS is pricing in a 98% chance of a 50bps cut this week, with another 25bps fully priced for April and a cumulative 113bps of cut through to November 2025
• Expiries today include; 0.5550 (NZD350.9m) Upcoming notable strikes: 0.5450 (NZD1.71b Feb. 19), 0.5800 (NZD864.8m Feb. 19), 0.5650 (NZD525m Feb. 19)
• There is nothing on the calendar today

AUDUSD rose 0.1% to 0.6359 but traded in a narrow range following Monday’s APAC session. It found some support from a weaker US dollar (USD BBDXY -0.1%) and stronger European equities (the US was closed). The RBA decision is announced today and it is widely expected by markets and analysts to cut rates 25bp to 4.1%.

• With AUDUSD trading above key short-term resistance at 0.6331, the bull trend has been reinforced and a stronger reversal highlighted. However, moving average studies remain in a bear-mode position. Initial support is at 0.6303, 50-day EMA, while resistance is at 0.6384, 13 December high.
• The yen outperformed on Monday leaving AUDJPY down 0.4% to 96.32 after a recent low of 96.20.
• AUDNZD is slightly lower at 1.1082. It exceeded 1.11 a number of times but couldn’t sustain the move. The RBNZ is expected to cut rates 50bp on Wednesday.
• AUDGBP fell 0.2% to 0.5036 after an intraday trough of 0.5030. In contrast, AUDEUR rose 0.2% to 0.6066 after reaching a high of 0.6080.
• Equities were stronger with Euro stoxx up 0.5% and the DAX +1.3%. Oil prices were higher with Brent rising 0.8% to $75.32/bbl. Copper is down 1.5% and iron ore is around $105/t.
• See MNI RBA Preview here.