Alert Levels Review Eyed Today

NZD/USD sits at $0.7114, virtually unchanged on the day, with participants awaiting ministers' decision on nationwide lockdown settings. Weekend news flow bought little to inspire any volatility in early trade, keeping the pair rangebound.

• PM Ardern chairs a Cabinet meeting today to review Covid-19 alert levels in Auckland and the rest of New Zealand. While Director-General of Health Bloomfield said Sunday that there was no widespread, undetected community transmission of the virus, a number of health experts told local media outlets that lowering the alert level in Auckland is very unlikely.
• On a different front, ASB published their Housing Confidence Survey, which showed that a net of 58% of respondents expect house prices to rise over the next 12 months. However, ASB Chief Economist Tuffley said he sees property price inflation slowing to +2% Y/Y next year, owing to the RBNZ's macroprudential action, the government hitting investors with a "tax hammer" and "some upward creep in mortgage interest rates". Worth noting that Kiwibank have just raised their home loan rates, after Westpac and ASB raised theirs last week.
• New Zealand's economic docket is headlined by the Food Price Index and preliminary results of ANZ Survey of Business Opinion. The main point of note this week, however, is Thursday's release of Q2 GDP data.
• From a technical point of view, bulls need a break above Sep 3 high of $0.7170 to regain poise. Their next target is located at $0.7213, the 61.8% retracement of the Feb 25 - Aug 20 sell-off. Bears look for a dip through the 100-DMA/Sep 8 low at $0.7080/76, which would open up the 50-DMA at $0.7002.