Antipodeans Unwind Post US CPI Gains Further

The USD is finding some support in the first part of trade today, most notably against AUD and NZD. The BBDXY is down slightly though, as EUR and JPY outperform modestly against the antipodeans. Cross asset signals are muted with regional equities higher, but not to the same magnitude as US moves overnight, while US futures are up smalls. US cash Tsys have had a quiet start, the 2yr yield up 0.5bps.

• NZD/USD is down around 0.30% versus NY closing levels, last close to 0.6445. Note we were tracking near 0.6400 prior to the US CPI print overnight. There have been a host of headlines around the government's fiscal update (HYEFU), with the economy expected to enter recession in Q2 next year, although the downturn is forecast to be shallow.
• Earlier the NZ current account deficit widened, but was close to expectations at just over $NZ10bn for Q3. RBNZ Governor Orr also spoke, but comments were in line with previous statements.
• AUD/USD is also down, last at 0.6830 (-0.40%). RBA Governor Lowe also spoke but didn't touch on monetary policy.
• USD/JPY is down slightly on opening levels, last around 135.350. Some demand for the yen appears evident heading into the Tokyo fix.
• Japan data released earlier was generally better than expected, with the Q4 Tankan survey showing less deterioration than expected across the manufacturing space. Capex intentions were slightly weaker than expected though.
• The data calendar is fairly light until later today with UK CPI due, although the US FOMC meeting this evening will be the main focus.