Kiwi Under Modest Pressure After Auckland Goes Into Lockdown

NZD/USD re-opened slightly lower after New Zealand imposed a three-day snap lockdown in Auckland and raised the alert level in the rest of the country to 2 in reaction to the detection of three new community cases of Covid-19. NZD/USD has ticked away from session low of $0.7206 and last trades at $0.7222, little changed on the day.

• PM Ardern confirmed this morning that the three new cases are the UK variant of the virus. Restrictions will be reviewed daily and are planned to last for 72h. Alert level 2 requires citizens to observe social distancing rules and wear masks (although schools and businesses remain open), while Aucklanders were asked to stay at home.
• NZ Ministry of Health will give an update on the Covid-19 situation at the top of the hour, with a post-Cabinet presser from PM Ardern & Dr Bloomfield due three hours later.
• Services PMI deteriorated to 47.9 in Jan from Dec's 49.1, with BNZ noting that the index "has been warning all is not well in the service sector and this remains the case into the New Year."
• Bears need a fall through Feb 12 low/50-DMA at $0.7176/65, which would turn focus to Feb 5/2 lows of $0.7136/35. On the topside, Feb 9 high of $0.7254 provides the initial target and a break here would open up Jan 6 cycle high of $0.7315.
• New Zealand's REINZ House Sales come out Tuesday, with PPI coming up Friday.