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Corrective Bounce


10Y Real Yields Close To Mar’21 Highs


BLOCK, Conditional Curve Flattener


$5.5B Citigroup, $3.5B JP Morgan Debt Issuance

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NZD/USD staged a foray above resistance from recent highs in the $0.7225-26 area on Monday, as weekend fiscal comments from U.S. Tsy Sec Yellen supported risk appetite, while NZD liquidity was sapped by a public holiday in New Zealand. The kiwi finished the day atop the G10 pile.

  • NZ FinMin Robertson delivered his 2021 Budget Policy Statement, noting that the Tsy won't set itself a specific net debt target this year and will aim to stabilise net debt by mid-2020s. Spending allowances were left unch. vs. December's Half-Year Economic and Fiscal Update.
  • Robertson addressed the spiralling housing market and announced that the gov't would unveil measures to address the "housing crisis," which would include steps to control demand later this month.
  • The RBNZ has moved to crack down on lending to residential property investors to reign in soaring house prices. In a statement released this morning, the RBNZ said it will reinstate LVR restrictions (they were removed last April in the midst of the Covid-19 crisis) in a phased manner. Restrictions will be reinstated from Mar 1 at the same level they were at prior to removal, with further tightening scheduled for May 1.
  • Recent data signals confirmed that NZ housing mkt is red hot, with QV House Price Index rising 6.27% over the three months through Jan.
  • ANZ Truckometer Heavy declined 3.8% M/M in Jan after rising 1.3% in Dec. ANZ commented that it "isn't the strongest start to the year, but in the bigger picture it's just a return to trend."
  • NZD/USD sits at $0.7219, marginally shy of neutral levels. A dip through the key 50-DMA at $0.7152 is needed to revive the bearish case and open up Jan 28/18 lows of $0.7106/0.7096. Conversely, bulls need a push through Jan 26 high of $0.7248 before targeting Jan 6 high of $0.7315.
  • The RBNZ will publish inflation expectations later today, while BusinessNZ M'fing PMI & food price index are due Friday.
MNI London Bureau | +44 203-865-3806 |
MNI London Bureau | +44 203-865-3806 |
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