Kiwi Firms Up During Local Holiday

NZD/USD has added a handful of pips early doors, with local liquidity sapped by a market holiday in New Zealand. The pair changes hands +10 pips at $0.7208, trading through last Friday's high, as the kiwi sits atop the G10 pile.

• The rate recoiled from its 50-DMA into the weekend, in yet another sign that the moving average is a crucial near-term layer of support. A further topside move through Feb 3 & 4 highs of $0.7225 would open up Jan 26 high of $0.7248. Meanwhile, a slide through the aforementioned 50-DMA at $0.7148 would turn focus to Jan 28/18 lows of $0.7106/0.7096.
• The RBNZ will publish inflation expectations tomorrow. Looking further afield, BusinessNZ M'fing PMI & food price index are due tomorrow.
• Elsewhere, all eyes will be on tomorrow's Budget Policy Statement from FinMin Robertson. The Minister will provide an update on the priorities of the gov't's 2021 spending plan.
• Ahead of Robertson's speech, interest.co.nz reported that the Tsy & RBNZ explicitly warned the FinMin in Jan 2020 that deploying unconventional monetary policy would increase inequality and fiscal authorities would bear responsibility for addressing these distributional externalities.