NZD: NZD Firms Amid Higher Global Equities, Volatility Post US CPI Print**

As per MNI's short preview last week for Chair Powell's congressional testimony starting in the Senate on Tuesday followed by the House on Wednesday (both at 1000ET/1500GMT): we will be looking for Powell to reiterate in some form that "we do not need to be in a hurry to adjust our policy stance", with policy "well-positioned" to address developments as they arise, though once again we will be interested in how he characterizes the current degree of policy restrictiveness. It's very unlikely he will be specific on the potential monetary policy consequences of shifts in trade/fiscal/immigration policy, especially given the setting.

• Some analyst expectations for Powell's testimony:
• BMO FICC: "will be notable insofar as how the Chair chooses to characterize the tariff announcements thus far and whether they leave the FOMC more or less likely to respond via monetary policy."
• CIBC: "will give a closer look at how the Fed and the new administration will get along (or not)."
• Deutsche: "Though normally investors would focus on the first day of Powell's testimony, Wednesday's appearance may take on added significance given the release of the the January CPI
  data earlier in the morning.In general, we expect Powell will largely reiterate the message from the January FOMC meeting that with a strong economy, solid labor market, and bumpy progress on inflation, the Fed is not in a hurry to cut rates."
• ING: "It is hard to see why Powell would want to push a more dovish narrative right now."
• TD Securities: "The chairman is expected to repeat that the FOMC is in no rush to make policy changes."

After falling sharply to 0.6231 on the news of 25% tariffs on US imports of steel and aluminium, AUDUSD spent the rest of Monday recovering helped by higher commodity prices and later in the day stronger US equities. The pair is up 0.1% to 0.6278 after reaching a high of 0.6287 earlier. The USD index is 0.2% higher boosted by further US tariffs.

• Despite Monday’s recovery, the trend structure in AUDUSD remains bearish. The low on February 3 confirmed the continuation of the downtrend. Initial support is at 0.6171, February 4 low, while initial resistance is at 0.6302, 50-day EMA.
• The yen underperformed on Monday given better risk sentiment which left AUDJPY up 0.5% to 95.40 after a high of 95.68. Kiwi was another underperformer and so AUDNZD rose 0.4% to exceed 1.11 and is currently at 1.1128. AUDEUR was up 0.3% to 0.6091, close to the intraday high, and AUDGBP +0.4% to 0.5077.
• Equities rallied with the S&P up 0.7% and Euro stoxx +0.6%. Oil prices were higher with Brent +1.8% to $76.02/bbl. Copper rose 2.4% and iron ore is stronger at around $107/t.
• Westpac consumer confidence for February and the January NAB business survey print today.