NZ Finds New Covid Cases In Community Ahead Of Decision On Lockdown Extension

NZD/USD sold off Tuesday as the FT circulated a report suggesting that China could limit exports of rare-earth minerals to hurt U.S. defence industry, while the greenback was bolstered by firmer U.S. Tsy yields & mid-month demand. The rate pulled back from its early highs as a result, despite printing best levels since Jan 8 in early Asia-Pac trade.

• The kiwi has come under pressure this morning as a degree of broader risk aversion has crept in, while New Zealand declared two new cases in the community ahead of today's decision on whether to extend the snap lockdown implemented in Auckland. PM Ardern will formally announce the decision during a press conference at 16:30 NZDT.
• Worth noting that commentators see a scenario in which Auckland's alert level would go down straight to level 1 from level 3 as unlikely as the gov't has always moved alert levels down by one notch at a time.
• The two new cases were students at Papatoetoe High School linked to the three cases reported on Sunday, when the gov't raised alert levels across the country. Officials still await the results of a number of close contacts of the new cases.
• On a different front, headline price index rose 3.0% at yesterday's GDT auction, with whole milk powder rising 4.3% as the dairy market remains buoyant.
• NZD/USD has shed 29 pips thus far and last sits at $0.7186. Bears look for a fall through the nearby 50-DMA at $0.7172, which would open up Feb 5/2 lows of $0.7136/35. Bulls need a rebound above Feb 16 high of $0.7269 to regain some momentum.
• Looking ahead, Statistics New Zealand will publish PPI data on Friday.