Eyeing Fresh Cyclical Lows

NZD finished last week on a softer note. The currency dipped nearly 0.90% through Friday's session, the worst performer within the G10 FX space. Early trading today has been muted, we sit slightly above Friday's lows, last at 0.5610/15. The focus remains on downside pressures, with late September lows of 0.5565 within reach. Beyond that is the March 2020 low of 0.5470.

• Similar themes were evident on Friday that were in play for much of last week, with core yields continuing to recover. Resilient US payrolls data pushed the US 2 yr back close to cyclical highs (4.30%).
• US equities fell further, while the VIX edged above 31%. NZD continues to show a decent beta to equity risk moves.
• Weekend news around the bridge explosion in Crimea is likely to keep tensions in the EU area elevated. Also note the Caixin services PMI in China fell sharply to 49.3, versus 54.4 expected.
• In line with these themes around risk appetite, the AUD/NZD cross pushed higher to 1.1375, but we are now back at slightly lower levels (last 1.1355).
• The domestic data calendar is quiet today. Early tomorrow the ANZ Truckometer index prints for September, also out is card spending figures for the same month.