Kiwi Creeps Higher Amid Antipodean Outperformance

NZD/USD turned bid in Monday's London hours, in line with a retreat in the BBDXY index.

• Data from the RBNZ showed that 2-year out inflation expectations dipped for the first time since 2020, which applied some incremental pressure to the kiwi in late Asia-Pac hours.
• Demand for NZD/USD emerged amid continued slide in U.S. Tsy yields, as participants assessed Fed rate-hike outlook in the interim between last Friday's expectation-busting jobs report & this Wednesday's inflation data.
• Solid performance from European stock benchmarks helped create a favourable backdrop for riskier FX, albeit equity strength fizzled out on Wall Street.
• The reaction to China's record trade surplus released over the weekend may have further supported the Antipodeans, even as the aggregate BBG Commodity Index dipped.
• NZD/USD trades flat at $0.6286 at typing. A break above Aug 1 high of $6353 would allow bulls to target Jun 16 high of $0.6396. Conversely, the low print of Jul 14 at $0.6061 provides the initial firm layer of support.
• The latest ANZ Truckometer Heavy Index fell 0.1% M/M in July, but the authors of the survey flagged that consumers "are still spending," which means "the RBNZ clearly has more work to do." Card spending data, due shortly, will shed some more light on trends in consumer behaviour.
• Later this week, BusinessNZ M'fing PMI & RBNZ household inflation expectations will cross the wires on Friday.