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Firmer Start, Q3 CPI Headlines Week's Docket


NZD/USD is firmer in early trade, rising ~0.5% albeit amid thin liquidity as the NZ election on Saturday saw the Labor government lose power to the Nationals. The count remains ongoing and the Nationals may not have a majority in parliament. Bloomberg reporting that the US has held talks with Iran through back channel warning against conflict escalation in the Middle East is also helping sentiment. The pair prints at $0.5910/15.

  • On Friday Kiwi fell ~0.7% finishing the week down ~2%. NZD/USD breached the $0.59 handle as equities fell as the UofMich Inflation Expectations data beat expectations seeing the greenback firm. Equities were pressured, weighing on risk sentiment, as an invasion of the Gaza strip appeared to be imminent.
  • Technically NZD/USD now sits in a downtrend, bears look to break the YTD low at $0.5860, this opens the $0.58 handle and $0.5730 a Fibonacci projection. Bulls focus on the 20-Day EMA ($0.5952) and the high from 2 Oct ($0.6010).
  • AUD/NZD has trimmed Fridays gains this morning, again in thin liquidity, the pair sits a touch above the base of the recent range.
  • Cross asset wise on Friday; WTI rose ~6% and US Tsy yields were lower. The S&P500 fell ~0.5% and BBDXY was ~0.1% higher.
  • On the wires at the bottom of the hour we have September PSI, there is no estimate and the prior read was 47.1. Tomorrow Q3 CPI is due, this is the highlight of the week's docket.

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