Kiwi Eyes Offshore Catalysts

Offshore catalysts were in the driving seat Thursday, as weakness in U.S. tech equities weighed on NZD/USD in Asia-Pac trade. The pair clawed back losses into European hours, before receiving a boost from cross-flows after ECB monetary policy decision. The greenback went offered against the euro as ECB Pres Lagarde refused to rule out a rate hike this year. NZD/USD held the bulk of post-ECB gains into the close, making Thursday a bullish outside day.

• U.S. equity market dynamics continue to affect G10 price action, with strong earnings reports from Amazon and Snapchat lending helping the tech space recover. Risk-sensitive Antipodean currencies outperform at the margin as we type.
• NZD/USD has added 8 pips thus far and last operates at $0.6669. A break above the $0.6702/03 area, which limited losses in Dec, would shift bullish focus to Jan 19 high of $0.6812. Bears see Jan 28 low of $0.6530 as their initial target.
• Note that PM Ardern is in Auckland, where she will speak about the Omicron outbreak. On the data front, focus now turns to New Zealand's inflation expectations (Wednesday) and BusinessNZ Manufacturing PMI (Friday).