Kiwi Gets Risk Appetite Boost

NZD/USD surged post the Asia close on firmer risk appetite and softer USD sentiment. We gained over 1.50%, moving up 0.6560, which is where we open this morning. Cross-asset signals were positive for the NZD.

• US and EU equities rose strongly, while the VIX index close sub 25%, its lowest close in well over a month. This supported NZD against the safe havens, NZD/JPY is now up above 85.00, its firmest level since late April. US yields were steady on mixed data.
• Commodities firmed, with oil closing higher, as doubts are raised on OPEC's ability to meet increased supply in the near term.
• The 50-day MA comes in just above 0.6600 for NZD/USD.
• The local data calendar has volume of all buildings work for Q1 on tap. The market expects a 0.5% rise, following last quarter's 8.9% surge.
• Earlier, ASB published its Housing confidence survey. A net 11% of respondents expect house prices will rise in the next 12 months, down from 49% in the January survey. ASB stated this was a resilient result.
• China's Ambassador to NZ stated that NZ should not take its positive brand in China for granted. This comes after Prime Minister Ardern's meeting with US President Biden and on-going tensions in the Pacific.