Little Progress On Debt Ceiling Weighs On Risk Appetite, RBNZ On Tap

NZD/USD prints at $0.6240/45, the pair fell ~0.6% on Tuesday.

• Kiwi was pressured through Tuesday's session as concerns over the lack of progress on the US Debt Ceiling weighed. House Republicans questioned the urgency of the deadline imposed by Tsy Sec Yellen for when the government will start missing debt payments.
• NZD/USD broke below the 200-Day EMA ($0.6259) and sits a touch below the 20-day EMA ($0.6250), support was seen below the $0.6240 and losses were marginally pared.
• Rate differentials, observed via 2 year swaps, sit at +128bps which is a fresh cycle high and the highest level since the SVB crisis.
• Bulls target the high from 11 May at $0.6385, on the downside bears first look to break the low 12 May $0.6182.
• AUD/NZD is consolidating in a narrow range see-sawing around the $1.06 handle.
• Cross asset wise; S&P500 fell ~1.1% and BBDXY rose 0.2%. 10 Year US Treasury Yields fell 2bps.
• The latest monetary policy decision from the RBNZ headlines Wednesday's docket, the bank is expected to lift the OCR by 25bps to 5.50%. We also have Q1 Retail Sales ex Inflation, a rise of 0.2% is forecast.