BBDXY A Touch Lower To Start The Week, NZD Outperforms

The USD has traded on the defensive to start the week, with the post-LNY re-opening of mainland China markets front and centre in Asia.

• The BBDXY has had a couple of limited showings below Friday’s low.
• The initial Chinese equity uptick was a little more subdued than many expected, with economic caution remaining evident despite seemingly strong LNY activity data.
• Still, the CSI 300 firmed into the close, adding ~1.2% and going out at best levels, which will have weighed on the greenback.
• The Antipodeans benefitted from China matters, with the NZD drawing further support from the latest pushback of RBNZ cut expectations from one of the “Big 4.”
• The kiwi tops the G10 FX table as a result.
• SEK saw some very modest appreciation on the back of the in line to firmer-than-expected domestic CPI data.
• We had noted before today's print that the bar to early Riksbank rate cuts is quite high. On the surface, the MNI Markets Team believes today's readings make the outside chance of a March rate cut near-zero, and a cut in May quite a bit more unlikely.
• The broader macro docket is thin today, with the presence of the U.S. Presidents’ Day holiday set to thin out liquidity.
• Asia-Pac interbank FX volumes ran ~20% below the recent norms despite the return of Chinese participants, per several desks.