Budget Day

NZD/USD tumbled Wednesday alongside the BBG Commodity Index, with the greenback drawing additional support from FOMC minutes, which suggested that some policymakers were open to debate adjusting the pace of bond-buying if rapid economic recovery continues. The rate fell to its worst levels in a week.

• It is the Budget Day today. New Zealand has weathered the Covid-19 crisis in a much better shape than forecast in December's HYEFU and the Treasury is expected to revise down its bond issuance plan. Cabinet members have provided very few hints on the details in pre-Budget speeches delivered over the last couple of weeks, while FinMin Robertson emphasised the need to strike a fine balance between providing continued stimulus and keeping a lid on debt. Robertson is expected not to mimic his Australian counterpart's turn towards big spending, despite New Zealand's relatively healthy fiscal position.
• On the data front, New Zealand's credit card spending comes out tomorrow.
• NZD/USD trades flat at $0.7169 as we type. Bears look for a dip through the 50-DMA/May 13 low at $0.7140/35, which would shift focus to May 4 low of $0.7116. On the topside, focus falls on May 18 high of $0.7271 and a break here would give bulls a green light for targeting May 10/Mar 2 highs of $0.7305/07.