Budget 2021 Under Scrutiny, RBNZ Up Next Week

NZD/USD crept higher Thursday, but remains poised for its second weekly loss in a row. Yesterday's upswing was driven by the greenback's retreat seen as participants reassessed the latest FOMC minutes. The rate ground higher despite a decline in BBG Commodity Index.

• FinMin Robertson delivered the 2021 Budget Thursday, using New Zealand's better than expected fiscal position to boost benefits and infrastructure spending. He also announced the forthcoming creation of a Social Unemployment Insurance Scheme. Westpac commented that the Treasury was surprisingly conservative in the new financial projections, which translated into "a Budget that feels less ambitious than it could have been."
• Known from his fiscal conservative leanings, Robertson told BBG Thursday evening that "for not we don't have a specific target [for net debt]," even as he wanted New Zealand to "return to a more sustainable fiscal position". Meanwhile, Robertson underscored the importance of New Zealand's relationship with China.
• Worth noting that monthly credit card spending data will be released out of New Zealand today. Looking further afield, the RBNZ will deliver their MonPol decision & publish updated forecasts next Wednesday. Elsewhere, Monday's retail sales, Wednesday's trade balance & Friday's ANZ Consumer Confidence headline the local data docket next week.
• NZD/USD last trades at $0.7197, just shy of neutral levels. Initial topside focus falls on May 18 high of $0.7271 and a break here would open up May 10/Mar 2 highs of $0.7305/07. On the flip side, a dip through May 19 low of $0.7152 would turn focus to May 13 low of $0.7135.