NZD: NZD/USD - Drifts Lower From 0.5950, Albeit Back Within Its Range
The NZD/USD had a range today of 0.5926-0.5940 in the Asia-Pac session, it is currently trading around 0.5930, -0.17%. The NZD has drifted lower in Asia as the USD finds a bid on the bump up in oil. The NZD is again back into its 0.5885-0.6015 range after a false break lower, I would still be skewed to fading rallies while below 0.6005-0.6025. On the day, I suspect sellers could return back toward the 0.5965-0.5995 area, looking for the pair to move lower at some point. As mentioned though a break back above 0.6025 would be problematic for the bears.
- MNI AU - NZ Q4 Building Volume Work Falls, Below Forecasts, Q3 Rise Revised: At the margin, lack of upside momentum in the construction side of the economy should give the RBNZ confidence around core inflation pressures remaining contained. We will get more partials for NZ Q4 GDP next Thursday, when manufacturing activity is due. Note that Q4 GDP prints on March 19.
- MNI AU - NZ House Prices Edge Up In Feb But Still Negative Y/Y: The RBNZ noted at its last policy meeting the lack of house price recovery in this cycle, and that the consumption recovery would have to be aided more so by labour income (as opposed to improving housing wealth, like we have seen in previous cycles).
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.5950(NZD924m). Upcoming Close Strikes : 0.6000(NZD322m March 6) - BBG
- The NZD/USD Average True Range for the last 10 Trading days: 68 Points
Fig 1: NZD/USD Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
BONDS: NZGBS: Closed Richer Before RBA Decision, NZ-US 10Y Diff Tighter
NZGBs closed 1-2bps richer across benchmarks, solidly outperforming US tsys on the day. The NZ-US 10-year yield differential finished 7bps tighter at +32bps. Today’s move, therefore, allowed the differential to hold the range it has traded in over the past 12 months.
- Notably, the NZGB market was closed at the time of today’s RBA decision. Accordingly, there may be some negative spillover from ACGBs given the sharp sell-off post the RBA’s 25bps rate hike.
- Swap rates closed 2-3bps lower.
- RBNZ-dated OIS pricing closed little changed across meetings. No tightening is priced for February, while December 2026 assigns 51bps.
- Tomorrow, the local calendar will see Q4 Employment data.
- On Thursday, the NZ Treasury plans to sell NZ$225mn of the 4.50% May-30 bond, NZ$175mn of the 4.25% May-34 bond and NZ$50mn of the 5.00% May-54 bond.
Bloomberg Finance LP
FOREX: USD - BBDXY dragged Below 1190 By The Bounce In The AUD
The BBDXY has had a range today of 1188.83 - 1191.78 in the Asia-Pac session; it is currently trading around 1189. Risk has had an impressive turnaround thanks to a very strong US ISM Man PMI. What's interesting about the USD price action is that recently this type of price action would have seen the USD give back most of its recent gains, but it continues to hold around 1190, the large bounce in the AUD is seeing it begin to pullback in Asia though. I suspect that bounces will continue to find sellers in the short-term as the USD still has few friends. On the day, the first resistance remains in the 1190-1195 area and then more importantly back towards 1200 where I suspect sellers would return in earnest.
- EUR/USD - Asian range 1.1787-1.1815, Asia is currently trading 1.1814. Price action has left an ugly bearish shadow on the weekly chart, but we are approaching levels that should start to see some buyers return. On the day, the support is between the 1.1760-1.1790 area initially a move through here would open up a deeper reversion back to the important 1.1700 area where I suspect buyers would again return. I suspect a bounce back toward the 1.1870-1.1910 area would find sellers first up as the pair looks to consolidate.
- GBP/USD - Asian range 1.3661-1.3691, Asia is currently dealing around 1.3691. The pair like everything else had an ugly weekly close leaving a clear rejection of the 1.3850 area. On the day, first support is 1.3600-1.3650 then the 1.3500 area.
- Cross asset : SPX +0.25%, Gold $4820, US 10-Year 4.28%, BBDXY 1189, Crude Oil $61.93
- Data/Events : Italy HCOB Italy New Car Registrations, Spain Unemployment Change, France CPI
Fig 1: GBP/USD Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
GOLD: Gold Nears 20-day EMA, as Dip Buyers Emerge
- Gold snapped a three day losing streak, tracking back up towards its upper technical resistance Tuesday.
- Opening the day at US$4,661.45 following an overnight close -4.7% down, gold resumed its upward trend reaching $4,855.93 - above the 20-day EMA of $4,821.65, before falling back below and stabilizing around $4,820.20.
- Market chatter suggests dip buyers are behind the move as the USD moderates and positive momentum returns for the precious metal.
- Should gold retest and hold above the 20-day EMA, beyond that $5,000 is the next key level.
- Gold's rally comes as risk sentiment bounces across the region with key equity markets strong, and geo-political risk stabilizing for now.
