Dollar Steady Ahead Of Key Central Bank Meetings

It has been a fairly muted start for G10 FX markets in Monday trade to date. Of course we have key central bank meetings tomorrow in terms of the BoJ and the RBA. Later in the week is the Fed.

• The BBDXY sits unchanged, last at 1235.70. Earlier highs (close to 1236.50) weren't sustained with UST yields slightly lower. This has likely curbed USD upside to a degree. US equity futures have firmed as well, which has likely aided higher beta FX performance as well.
• NZD and AUD sit modestly higher, with regional equities mostly higher. China activity figures were slightly better than forecast, although property indicators remained weak. AUD/USD was last near 0.6570, with iron ore back above $100/ton.
• NZD/USD is slightly outperforming, last back close to 0.6095. NZ PM Luxon presented a downbeat view of the economy and NZ front end rates have not risen in line with the US over the past few sessions. Still the better equity tone has likely provided some offset to these headwinds.
• USD/JYP dips sub 149.00 have been supported. The pair was last near 149.10. Earlier highs were at 149.33, which came after the BoJ announced an unscheduled repo operation. The flurry of media articles post last Friday's stronger than expected wages outcome points to a BoJ shift tomorrow.
• Still a tightening cycle which is unlikely to be aggressive, coupled with reports of continued BoJ bond buying, is likely dampening any sentiment this is a dramatic game changer for yen.
• Looking ahead it is a fairly quiet start to the week data wise, with the NAHB index printing in the US, the main data print of note.