Kiwi Stable, Gov't To Unveil Traffic Light System Details

NZD/USD trades flat as the dust is settling after Friday's risk sell-off inspired by growing angst surrounding the Omicron variant of the Covid-19 virus. The rate edged higher in early trade but has given up those modest gains as NZ 10-Year yield dipped to a 1-month low.

• The Cabinet will hold a presser at 16:00 NZDT/03:00 GMT to unveil the details of the new traffic light framework of managing Covid-19, which will take effect on Friday. PM Ardern is set to announce which parts of the country will start at the "orange" and which at the "red" level, while FinMin Robertson will outline new support measures for businesses.
• The NZ docket this week features final ANZ Business Confidence (Tuesday), building permits (Wednesday) & terms of trade (Thursday).
• NZD/USD last changes hands at $0.6824, little changed on the day. The key near-term layer of support has been defined at $0.6805, which limited losses on Aug 20 & Nov 26. A break here would open up Nov 2, 2020 low of $0.6589. Conversely, a bounce above the 50-DMA at $0.7031 would give bulls some reprieve.