NZD: NZD/USD Eyeing 2022 Lows
NZD followed the broader USD trajectory and weakened post the Asia close. We dipped sub 0.6250 late in NY but currently sit slightly firmer at 0.6270.
- NZD has seen only modest outperformance against higher beta plays since the start of the week. NZD/USD is down 1.60%, versus AUD's 1.75% dip and NOK, off more than 2%.
- For NZD/USD, lows from mid-May just below 0.6220 are now in play. On the topside, we would expect to see some resistance around the 0.6350 region if seen.
- Locally, NZ food prices rose 0.7% in May, up from the 0.1% pace in April. In YoY terms we are back up to 6.8%, which is not too far asway from highs earlier in the year (7.6%).
- The RBNZ also stated that it received support for its liquidity policy review. The review launched in February 2022 aims to strengthen NZ's financial stability by lowering the likelihood of liquidity problems affecting the deposit takers that the RBNZ regulates.
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USDCAD TECHS: Bullish Outlook
- RES 4: 1.3173 High Nov 13 2020
- RES 3: 1.3168 2.0% 10-dma envelope
- RES 2: 1.3091 High Nov 24 2020
- RES 1: 1.3077 High May 12
- PRICE: 1.2933 @ 16:46 BST May 13
- SUP 1: 1.2914/2814 High May 2 / Low May 6
- SUP 2: 1.2737/14 50-day EMA / Low May 5 and a key support
- SUP 3: 1.2568 Low Apr 22
- SUP 4: 1.2459 Low Apr 21
USDCAD faded off the week’s highs into the close of the week, although the outlook remains bullish. Recent gains have resulted in a breach of 1.2914, May 2 high, and key resistance at 1.2964, the Dec 20 2021 high. The break of the latter marks an important medium-term bullish technical development and reinforces the positive outlook. This has opened 1.3168 next, the upper band of a MA envelope. Initial support is at 1.2914. Key support lies at 1.2714, Apr 29 low.
US TSYS: Risk-On AS Mkt Takes Adaptive Fed Seriously?
FI markets traded weaker after the bell -- 30Y Bond around upper half of the week's range but well off Thursday's highs. Little react to morning data (import prices lower than exp at +0.0%; U/Mich sentiment 59.1 vs 64 est, "lowest reading since 2013").
- Tsy 30Y Bond futures holding to narrow channel on the way down (30YY taps 3.0959 high vs. 2.9531% early Thu), curves bear steepening: 2s10s +5.017 at 33.449, 5s10s +2.367 at 4.881.
- Rates under pressure w/ focus back on Fed policy after Fed Chair Powell said he's prepared to consider larger than 50bp hikes in Marketplace interview late Thu (after downplaying 75bp moves at his press conference last week), as the committee adapts to "incoming data and the evolving outlook".
- Not that the correlation is a factor these days, but Equities did have a nice rebound on the day, SPX emini futures +99.0 at 4026.25.
- Commodities: WTI Crude Oil (front-month) holding strong +4.05 at $110.18; Gold weaker at $1807.95 -13.77.
- Next Monday Data Calendar:
- Empire Manufacturing (24.6, 15) at 0830ET
- NY Fed Williams moderated discussion, no text at 0855ET
- US Tsy $45B 13W, $42B 26W bill auctions at 1130ET
- Net Long-term TIC Flows ($141.7B, --) Net TIC Flows ($162.6B, --) at 1600ET
US: US-ASEAN Summit Concludes
The final event of the US-ASEAN summit, an exchange of views on regional and global issues, has concluded. US President Joe Biden and the Southeast Asian leaders will appear at a White House joint press event shortly.
- A livestream of the event is available here: https://www.youtube.com/watch?v=SpZz2944dmU
