Kiwi Rises On Upcoming RBNZ MonPol Decision, Trans-Tasman Spillover

NZD/USD creeps higher this morning in anticipation of RBNZ monetary policy meeting this week and a trans-Tasman spillover in the wake of Australia's federal election.

• The Labor Party is on track to take power in Australia, most likely with majority of seats in parliaments. The vote count is ongoing but the perception that the chance for a hung parliament has narrowed lends support to the AUD.
• Stats NZ will publish quarterly retail sales data on Tuesday. Consumer spending is expected to have barely grown in Q1 as New Zealand was facing the spreading outbreak of Omicron.
• But main focus this week falls on Wednesday's Monetary Policy Statement from the RBNZ and the subsequent presser with Governor Orr. Policymakers are expected to deliver the second consecutive 50bp rate hike.
• Swaps market prices an 85% chance of a 50bp rate rise come the end of this week's meeting, and outcome favoured by 16/18 economists surveyed by Bloomberg.
• Elsewhere, PM Ardern will lead New Zealand's trade delegation to the U.S. this week, but her meeting with President Biden is yet to be confirmed, as the Premier has only just recovered from COVID-19.
• NZD/USD trades +19 pips at $0.6413, poised to test May 19 high of $0.6417. A clean break here would give bulls a green light for targeting May 5 high of $0.6568. Bears would be pleased by a dip through May 18 low of $0.6291, which would expose key support from May 12 low of $0.6217.