New Zealand's House Sales Shrink But Prices Continue To Rise

NZD/USD struggled for a clear direction Monday, looking through headlines surrounding China's regulatory crackdown on the tech sector and PM Ardern's decision to extend current Covid-19 restrictions in Auckland and the rest of the country. The rate finished the day slightly higher on the day.

• While extending current Covid-19 rules, Ardern said that the Cabinet have agreed "in principle" to lower the alert level in Auckland to level 3 at midnight on Sep 21. The final decision will be made based on the most recent data.
• ANZ Chief Economist Zollner told MNI that robust business confidence data released yesterday suggest that the RBNZ will hike the OCR in October despite mobility restrictions related to Covid-19.
• The latest sales data from REINZ showed that activity took a hit from lockdown measures, with property sales shrinking 26.5% Y/Y in August. Nonetheless, median house prices rose 25.5% Y/Y to another fresh record, while REINZ Chief Executive Baird said that "we have heard from across the industry that prices achieved on sales completed in the early part of this lockdown continue to illustrate an ongoing excess of demand over supply; prices are still rising".
• Participants look ahead to New Zealand's BoP current account balance (Wednesday), GDP (Thursday) and BusinessNZ M'fing PMI (Friday).
• NZD/USD last trades at $0.7117, little changed on the day. Should the rate pierce Sep 10 high of $0.7156, bulls would be able to take aim at Sep 3 high of $0.7170. Conversely, a dip through the 100-DMA/Sep 8 low at $0.7079/76 would bring the 50-DMA at $0.7005 into view.